Facts

The Securities Exchange Commission initiated proceedings against Wedbush Securities Inc., Jeffrey Bell, and Christina Fillhart.

COMMISSION'S CONTENTIONS:
The SEC alleged that from July 2011 through January 2013, Wedbush served as the gateway to U.S. markets for dozens of trading firms and thousands of their traders. The SEC further alleged that during this period, Wedbush failed to implement risk management controls and procedures in order to manage the risk related to its market access business and ensure compliance with applicable regulations. The SEC contended that Wedbush allowed thousands of anonymous foreign traders to trade billions of shares every month in U.S. trading venues.

DEFENDANT'S CONTENTIONS:
Bell neither admitted nor denied the SEC's allegations.

Result

The parties entered into a settlement, in which Wedbush agreed to pay a civil penalty of $2,447,043. Wedbush was also ordered to cease and desist from committing any violations of certain rules and regulations. The SEC's order found that Wedbush violated the market access rule by failing to have adequate risk controls in place before providing customers with access to the market. The order also found that Wedbush committed other violations in connection with its market access business. Wedbush agreed to undertake certain steps to review and implement procedures for compliance with relevant regulations. Bell agreed to pay $25,000 in disgorgement and a $25,000 civil penalty. Fillhart also agreed to a $25,000 disgorgement payment and a $10,000 civil penalty.