Wedbush Securities Accused of Failing to Oversee Owner, Who May Have Cherry Picked Investments
The NYSE Regulation has filed a disciplinary case against Wedbush Securities Inc. accusing the firm of not properly overseeing the trading activities of firm owner and principal Edward Wedbush. According to the complaint, Mr. Wedbush, “actively” managed and traded in over 70 accounts and he had limited power over attorney over the accounts of relatives, friends, and some staff members. NYSE contends that he was never properly overseen, which increased the possibility of conflicts and manipulation, including cherry picking. For example, the regulator believes that the inadequate supervision of Mr. Wedbush gave him the “unchecked ability” to give the best trades to family members and himself because there was no system in place to make sure trades were fairly allocated.
Wedbush Securities has previously been subject to at least $4.1M over supervisory deficiencies. Last year, the Financial Industry Regulatory Authority ordered Mr. Wedbush to pay $50K for supervisory deficiencies involving regulatory filings. He also was suspended for 31 days from serving as a principal.
Wedbush Securities has been named in investor fraud complaints over the handling of their money.
Ex-Private Equity Sr. Partner Accused of Secretly Making Clients Pay for His Vacations
The US Securities and Exchange Commission has filed charges against ex-Apollo Management LP senior partner Mohammed Ali Rashid. The regulator claims that he secretly billed clients for about $290K in hair salon visits, family vacations, expensive electronics, and designer clothes.
According to the SEC, Rashid, who was earning millions of dollars, “took active steps” to hide his wrongful behavior. Even after the firm discovered the secret charges on two occasions, in 2010 and 2012, and was told to stop, he purportedly kept expensing his clients for his own expenditures into 2013.
NY Money Manager Who Stole $2.4M From Investors Gets 18 Years in Prison
A Manhattan money manager was sentenced to up to 18 years behind bars for stealing over $2.4M from investors. Steven Canady was accused by prosecutors of using Warburg Capital as a front to bilk at least seven customers.
According to prosecutors, Canady used investors’ money to pay for a $25K/month apartment at the Mandarin Oriental, fund his porn habit, and eat at expensive restaurants.
He is accused of telling investors that if they paid him a fee he would bankroll their ventures. This fee was supposed to be returned to them if he couldn’t get the loans he had promised. Instead, he kept their money for himself.
Ex-Investment Adviser Who Stole Retirement Funds of a Former Factory Worker is Sentenced to 37 Months
Jesse Holovacko is sentenced to 37 months behind bars after he stole money out of a client’s retirement fund. The client was an ex-factory worker. Holovacko was convicted on multiple counts of wire fraud and one count of investment adviser fraud earlier this year.
According to prosecutors, Holovacko had gone to the factory, introduced himself to the then-factory worker and other workers there. After signing the factory worker as a client, he moved the latter’s pension funds into an IRA and promised to use the money to buy bonds. Holovacko also told the client that issuing personal checks to him would make it easier to buy the bonds.
Instead of using the funds, totaling about $255K, as promised, Holovacko spend the client’s money on his own car loan, mortgage bills, and other expenses.
NYSE’s Complaint in the Wedbush Case (PDF)
If you think your financial losses may be due to investment adviser fraud, contact Shepherd Smith Edwards and Kantas, LTD LLP today so that we can help you explore your legal options.
Money manager sent to prison for stealing $2.4M from investors, NY Post, October 18, 2017
Former Investment Advisor Who Stole Client’s Retirement Savings Sentenced To 37 Months For Wire Fraud And Investment Advisor Fraud, DOJ, October 25, 2017
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