Aug 19 Brokerage firm Wedbush Securities
rejected Financial Industry Regulatory Authority's (FINRA)
charges, saying its risk management controls were consistent
with the regulator's guidance.
Wall Street's self-funded regulator on Monday charged
Wedbush with having shoddy risk controls and violating market
access rules, that in turn allowed thousands of traders to flood
U.S. markets and execute manipulative trades.
Market access rules were put in place in 2010 by the
Securities and Exchange Commission as one of the responses to
the "flash crash" that year in which the Dow Jones Industrial
Average plunged by about 700 points before sharply
The rules require brokerages that provide customers with
direct access to the market to have reasonable controls in
Wedbush said on Tuesday the dispute stemmed from trading
activity by certain clients that held market access accounts
through its Advanced Clearing Services business.
The brokerage said it terminated many of these accounts
nearly two years ago.
"To our knowledge, the trading activity at issue did not
result in any losses to any other market participants, to
Wedbush Securities or to its clients," Wedbush said in a
FINRA's allegations are wholly unrelated to the firm's
Capital Markets and Private Client groups and have no bearing on
client financial safety, Wedbush said.
Wedbush, one of the largest firms by trading volume on the
NASDAQ stock exchange, became the second firm to face charges
over market access rules by the SEC after KCG Holdings.
(Reporting By Neha Dimri in Bangalore; Editing by Saumyadeb