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A broker-dealer agreed to settle SEC charges, originally filed in March 2018, for failing to supervise one of its registered representatives and for ignoring various red flags indicating that the representative could be involved in market manipulation. According to the SEC Order, Wedbush Securities, Inc. ("Wedbush") was aware of aspects of a registered representative's manipulative trading of penny stocks, but Wedbush's supervisory policies and implementation systems failed to guide staff on how to properly investigate the activity and had no clear process for how to handle red flags of

Commentary by Steven Lofchie

In a "dialogue" held at Fordham University, SEC Chair Jay Clayton and Director of Division of Trading and Markets Brett Redfearn discussed (i) improving liquidity for thinly traded securities, (ii) revising SEA Rule 15c2-11 , ("Initiation or resumption of quotations without specific information"), as well as the rules applicable to the execution of trades in penny stocks for retail investors and (iii) the deficiencies in "core" market data as compared to proprietary data. On market data, the regulators expressed concern about the current "two-tiered" system. The "core" tier is the consolidated

Two broker-dealer firms agreed to settle SEC and FINRA charges of anti-money laundering violations for failing to report suspicious penny stock sales.