December 17, 2014 — To counter corruption in the securities market and protect investors, the U.S. Congress initiated a whistleblower program as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The program authorizes awards for informants who notify the Securities and Exchange Commission (SEC) about an impending or ongoing fraudulent scheme. Broker-dealer insiders frequently are privy to such information. Whistleblowers could receive from ten to thirty percent of the amount the government recovers, so long as the amount tops $1 million.
California Broker-Dealer Agrees To Hefty Financial Penalty To Resolve Charges Of Violating The Market Access Rule
Wedbush Securities, a California broker-dealer, has settled pending SEC charges involving market access violations for $2.44 million. The Los Angeles broker-dealer has admitted to SEC violations and agreed to hire an independent consultant to prevent future wrongdoing.
The SEC had charged that Wedbush ran afoul of the market access rule by deciding not to implement adequate risk controls prior to granting market access to its customers. Some of the broker-dealer’s customers were firms that had thousands of traders abroad who were virtually anonymous. Those traders should not have been given access to the market until the required safeguards had been put into place to protect unwary investors.
Jeffrey Bell, a former executive vice president with Wedbush, and Christina Fillhart, a senior vice president, were alleged by the SEC to have caused Wedbush’s market access rule violations. The two will settle those charges for a combined amount of more than $85,000, without an admission of wrongdoing.
Whistleblowers Notify SEC of Violations
While Waters & Kraus was not working with a whistleblower on this SEC matter, we are representing tipsters in similar instances of SEC fraud. If you have comparable claims against a your employer or anyone else engaged in securities fraud, email us or call our qui tam attorneys at 855.784.0268 to learn more about our practice and how we can work together to notify the government about SEC fraud and abuse. Our qui tam lawyers, like Michael Armitage and Louisa Kirakosian in the firm’s office in Southern California where the broker-dealer in this matter was located, are committed to advancing and protecting informants’ interests in whistleblower lawsuits.