CFTC orders Wedbush Securities to pay $6M for use of unapproved communication methods
The Commodity Futures Trading Commission (CFTC) today issued an order simultaneously filing and settling charges against Wedbush Securities Inc., a Los Angeles, California-based registered futures commission merchant, for failing to maintain, preserve, or produce records required to be kept under CFTC recordkeeping requirements, and failing to diligently supervise matters related to its business as a CFTC registrant.
Wedbush admits the facts in the order and acknowledges the conduct violated the Commodity Exchange Act and CFTC regulations.
The order requires Wedbush to pay a $6 million civil monetary penalty, to cease and desist from further violations of recordkeeping and supervision requirements, and to take specific remedial actions as written in the order.
The order finds that from approximately 2018 to the present, Wedbush employees, including those at senior levels, communicated both internally and externally on unapproved channels, including via personal text messages. Wedbush employees sent and received the written communications, which included messages related to Wedbush’s business as a CFTC registrant. These messages were required to be maintained under CFTC-mandated recordkeeping requirements.
The order finds Wedbush did not maintain or preserve thousands of communications, including communications related to its commodities business. Additionally, Wedbush generally would not have been able to provide the communications promptly to a CFTC representative when requested.
Finally, the order finds that as a result of these actions, Wedbush failed diligently to supervise its business as a CFTC registrant, in violation of CFTC recordkeeping and supervision provisions.
Earlier today, the CFTC announced the imposition of $260 million in fines on BNP Paribas, SocGen, Wells Fargo, and Bank of Montreal for similar reasons.