Wedbush Securities

Kurta Law is investigating possible investor losses for clients of Wedbush Securities.

Wedbush Securities (CRD#: 877) is a dually registered investment brokerage firm and investment advisory firm headquartered in Los Angeles, California.

Wedbush Securities has also operated under the following names:

• Wedbush Morgan Securities
• Wedbush, Noble, Cooke, Inc.
• Wedbush Pacgrow

Fees and Conflicts of Interest

Wedbush Securities discloses the following conflicts of interest in its Customer Relationship Summary (Form CRS):

• Brokers at Wedbush Securities are paid commissions on each transaction they execute.
• Investment advisors are typically paid asset-based fees that incentivize them to encourage you to increase your assets.
• Wedbush Securities and its affiliates earn greater compensation on its proprietary products, including when acting as a sponsor, underwriter, or manager for these products.
• The firm receives compensation in form of fees from issuers of certain investment products and funds, such as mutual funds, hedge funds, REITs, and variable insurance products. Product sponsors may also pay the firm to advertise their investments to Wedbush Securities investors.
• Third-party issuers of investments may also make revenue sharing deals with the firm which incentivize Wedbush Securities to sell you certain investments to generate revenue for the firm. For example, Wedbush Securities has a revenue sharing agreement with ETF Managers Group, which the firm also owns a minority interest in.

Broker-Dealer Services

In addition to stocks and bonds, Wedbush Securities offers the following investment products, some of which can come with excessive risk for investors. 

• Mutual funds
• Exchange-traded funds (ETFs)
• Unit investment trusts (UITs)
• Private funds (e.g., hedge funds and private equity funds)
• Structured products
• Variable insurance products, such as annuities
• Real Estate Investment Trusts (REITs)

Regulatory Actions

Wedbush Securities describes its history of regulatory actions on its detailed BrokerCheck record. Several entries include allegations that it failed to create adequate systems of supervision to prevent violations.

Six-Figure Fine by FINRA

On September 19, 2024, Wedbush Securities consented to the entry of findings that it allegedly published quarterly reports regarding its handling of investors’ orders in National Market System (NMS) securities that failed to disclose required information, contained inaccurate and incomplete information, or were not published in a timely manner from 2009-2022.

A Letter of Acceptance, Waiver & Consent (AWC), further alleged that the firm failed to notify its clients of the availability of information in these reports from January 2020 through December 2021. The firm allegedly also failed to create a supervisory system that would achieve compliance with NMS Rules 605 and 606.

FINRA censured the firm and fined it $425,000. You can read the full AWC here.

Alleged Failure to Supervise Broker Recommendations

On September 18, 2024, Wedbush Securities consented to the entry of findings that it allegedly failed to reasonably supervise its brokers’ recommendations of variable rate structured products (VRSPs) to clients.

These recommendations were allegedly unsuitably risky for these clients and also unsuitably concentrated them at levels equal to or exceeding 25% of the client’s liquid net worth.

In a Letter of Acceptance, Waiver & Consent (AWC), FINRA censured the firm and issued a fine of $50,000 and restitution of $77,736.33, plus interest. You can access the full AWC here.

Failure to Supervise: FINRA Rule 3110

FINRA Rule 3110 requires that firms establish systems of supervision to maintain their compliance with securities regulations. This includes appointing supervisors and providing them with Written Supervisory Procedures (WSPs).

Alleged Failure to Identify Fraud Red Flags

In an AWC filed on November 15, 2023, Wedbush Securities consented to the entry of findings that it allegedly failed to establish and enforce written supervisory procedures designed to monitor transfers of investor funds to third parties.

The AWC alleged that the firm failed to identify four fraudulent wire transfer requests totaling more than $6.6 million, which were later refunded to clients.

The firm was censured by FINRA, fined $350,000, and required to implement a system of supervision designed to achieve compliance with FINRA Rule 3110. You can access the AWC here.

$10 Million SEC Fine

On August 8, 2023, the Securities and Exchange Commission ordered Wedbush Securities to cease and desist, alleging that employees at all levels of the firm sent business communications through unapproved channels on their personal devices and that firm failed to preserve the majority of these communications.

The SEC censured the firm and fined it $10 million.

Brokers with Misconduct Allegations on Their Records

Kurta Law is aware of the following current or former brokers associated with Wedbush Securities with BrokerCheck disclosures. This is not necessarily a complete list, so if you have concerns about your broker’s conduct, contact a securities attorney.

• Andrew Hutcheson: https://www.kurtalawfirm.com/blog/andrew-hutcheson/ 
• Joel Farnsworth: https://www.kurtalawfirm.com/blog/joel-farnsworth/ 
• Jose Centeno: https://www.kurtalawfirm.com/blog/jose-centeno/ 
• James Stephan: https://www.kurtalawfirm.com/blog/james-stephan/ 
• Daniel Ives: https://www.kurtalawfirm.com/blog/daniel-ives/ 
• Matthew Kelleher: https://www.kurtalawfirm.com/blog/matthew-kelleher/ 
• Wendi DuBois: https://www.kurtalawfirm.com/blog/wendi-dubois/ 
• Jazmin Carpenter: https://www.kurtalawfirm.com/blog/jazmin-carpenter/ 

Kurta Law Can Help

Investors who lost money working with a Wedbush Securities broker or advisor should reach out to an investment fraud lawyer for help. Our attorneys offer free case evaluations and do not charge a fee unless we win your case. Call (877) 600-0098 or email info@kurtalawfirm.com.