SEC Actions

Silver Law Group is Investigating Wedbush Securities, Inc.

June 8, 2018 | Silver Law Group

Wedbush Securities, Inc. (CRD # 877) is a financial services and investment firm based out of Los Angeles, California. Wedbush currently has three pending regulatory actions against the firm.

One such action was initiated by the Securities & Exchange Commission in March 2018. The SEC alleges that Wedbush failed to reasonably supervise one of its registered representatives who engaged in manipulative trading for several years. The SEC also alleges that the firm learned of the representative’s activity, but did not have the systems in place to properly investigate it. Specifically, the firm received an email detailing the representative’s role in the fraudulent activity and was aware of multiple customer complaints brought against her, among other red flags alerting Wedbush to her conduct.

The New York Stock Exchange also has a pending action against Wedbush initiated in 2017. The NYSE claims that Wedbush failed to supervise the trading activities of its president. FINRA rules require member firms to create and maintain a system “that is reasonably designed to achieve compliance with applicable securities laws and regulations.” FINRA also requires that its members refrain from engaging in fraudulent or deceptive practices with their customers.

Securities Regulatory Authorities Were Well Aware of Problems with Wedbush Securities

June 8, 2018 | Silver Law Group

Wedbush Securities is facing discipline from the SEC, NYSE, and FINRA for a manipulative trading scheme involving its founder, Edward Wedbush. According to a recent article by InvestmentNews.com, however, all three agencies were well aware of problems within Wedbush for many years, but handed down no real, meaningful punishment to the firm. This allowed Mr. Wedbush to continue his scheme for years, hurting many investors along the way.

The complaint filed by the NYSE details a history of Wedbush’s run-ins with the three agencies. In 2015, Wedbush was fined by both the SEC and NYSE for “extensive and widespread supervisory deficiencies,” among other things. Before 2015, the firm “was fined over $2,000,000 by regulators in more than a dozen separate actions involving supervisory failures.”

The NYSE and FINRA’s Department of Market Regulation also conducted an investigation of Wedbush concerning violations of supervisory obligations, books and records keeping, trade mismarking, and other issues. FINRA then referred the investigation to its Legal Section of FINRA Market Regulation; NYSE finally took over the investigation in 2016. This extensive regulatory history shows that all three agencies were on notice of Wedbush’s repeated supervisory failures.

A New SEC Proposal Aims to Protect Investors

June 5, 2018 | Silver Law Group

The Commission proposes new regulations for financial advisors and dealer-brokers to avoid conflict of interest

While the Department of Labor (DOL) passed a fiduciary rule governing investment advice to retirees in 2016, a federal appeals court struck it down in its entirety in March of this year.

Considered by its advocates to be a positive step in protecting the rights of the elderly, the rule declared that brokers had to agree to a Best Interests Contract (BIC) agreement with their clients before being allowed to earn commissions and other forms of compensation.

Reporting Failures Cost Aegis Financial $1.3M In Fines

May 3, 2018 | Silver Law Group

FINRA and the SEC has fined Aegis Capital $1.3 million stemming from multiple reporting violations, including failing to report suspicious trades to the SEC. The regulators also allege that Aegis CEO and owner Robert Eide was responsible for causing the violations when he failed to respond to reports of suspicious activity. He was fined separately.

Aegis was fined for four separate violations:

Robert Eide, failure to file, $40,000

Woodbridge Group of Companies Principal Robert Shapiro Takes the 5th Amendment

November 28, 2017 | Silver Law Group

Robert Shapiro, president and CEO of Woodbridge Group of Companies (“Woodbridge”), has reportedly refused to answer questions from the Securities and Exchange Commission (“SEC”) relating to its investigation of Woodbridge’s business practices.

In a letter to the SEC, filed in federal court papers, Mr. Shapiro’s lawyer writes, “Upon consideration of the SEC’s investigative subpoenas and a review with counsel of the individual rights afforded by the United States Constitution, Mr. Shapiro will rely on his constitutional privilege to refuse to be a witness against himself.”

This disclosure occurs on the heels of a related SEC action against Woodbridge for the production of documents including e-mails and corporate documents relating to dozens of companies. According to the SEC, Woodbridge has raised over $1 billion from thousands of investors nationwide and is now under investigation for possible violations of the securities laws including anti-fraud violations.

Woodbridge Group of Companies Under SEC Investigation

November 28, 2017 | Silver Law Group

The SEC is investigating Woodbridge Group of Companies’ (“Woodbridge”) business practices.

According to a recent SEC application and supporting papers filed in federal court in Miami, Florida, the SEC is investigating whether Woodbridge and others have violated or are violating the antifraud, broker-dealer, or securities registration provisions of the federal securities laws in connection with Woodbridge’s receipt of more than $1 billion of investor funds from thousands of investors nationwide.

As part of the SEC’s ongoing investigation, on January 31, 2017, agency staff in the SEC’s Miami Regional Office served Woodbridge with a subpoena seeking, among other documents, the production of electronic communications that the company maintained relating to Woodbridge’s business operations. The SEC’s application alleges that although Woodbridge was required to produce these documents to the SEC, Woodbridge has failed to produce relevant communications in response to the subpoena, including those of three high-level Woodbridge officials.

Federal Employee Benefit Counselors Targeted Federal Government Employee Retirement Plan Participants With Variable Annuities Scheme.

August 2, 2017 | Silver Law Group

Silver Law Group and The Law Firm of David Chase are reviewing potential claims of fraudulent inducement of federal employees into purchasing high fee paying variable annuity products by LPL Financial LLC (CRD#6413) affiliated brokers Brandon Long (CRD# 5975459) , Christopher S Laws (CRD#4479529) , Johnathan Dax Cooke (CRD#5365691) and Danny Scott Hood (CRD#3236852).

Variable annuities (“VAs”) are highly-complex financial products. According to FINRA, a good way to think of a VA is as a cross between an insurance product and an investment product.

Like other annuities, a VA is a contract between the investor and an insurance company. The investor pays the insurer a single payment or a series of payments called premiums. In exchange for those premiums, the insurer promises to make periodic payments to you either immediately or at some point in the future.

New York City-based Broker Permanently Barred by FINRA; Allegation of VGTel Sale

June 6, 2017 | Silver Law Group

Rafael Santiago (CRD# 2494647) of New York, New York firm Primary Capital, LLC (CRD# 127921) is under investigation after being barred from the securities industry in April 2016.

Santiago, according to his Financial Industry Regulatory Authority (“FINRA”) BrokerCheck report was barred by FINRA after he failed to respond to FINRA’s request for information. Besides that misconduct disclosure on his FINRA BrokerCheck report, he has two other misconduct disclosures.

Santiago has a FINRA arbitration complaint pending where the claimant alleges $495,000 in losses. The complaint, filed in September 2015, according to the BrokerCheck report involve the notorious VGTel stock and Santiago’s involvement with VGTel promotion.

SEC Halts Chicago-based Fraud Targeting Seniors Involving Daniel H. Glick, Formerly of Transamerica Financial Advisors

June 6, 2017 | Silver Law Group

The SEC announced an emergency asset freeze and temporary restraining order against a Chicago-based investment adviser and his financial management company accused of scamming elderly investors out of millions of dollars.

In the SEC’s complaint, the SEC alleges that Daniel H. Glick (CRD# 2175655) and his unregistered investment advisory firm Financial Management Strategies (“FMS”) took advantage of seniors who entrusted him with millions of dollars’ worth of their retirement savings.

According to the SEC complaint, Glick and his companies raised over $6 million from elderly investors, with most of the money coming from two families. Glick first raised money though Glick & Associates until dissolution in 2014, then through Glick Accounting Services and FMS.

Former Edward Jones Broker Under Investigation for SEC Charges Alleging Theft of $1.2 Million to Remodel Home

June 6, 2017 | Silver Law Group

Silver Law Group is investigating former Edward Jones (CRD# 250) broker Bernard M. Parker (CRD# 2010184) after the SEC charged him for stealing investors’ money so he could remodel his home.

Parker has a lengthy list of disclosures according to his FINRA BrokerCheck report. In total, Parker has 14 disclosures.

Parker didn’t start off on the right foot, with his first employing firm, North American Management, Inc., permitting him to resign a mere three years after entering the industry due to an investigation involving the sale of unregistered securities without compliance approval by the firm.