Wedbush Securities, Inc. v. SEC

FILED
NOT FOR PUBLICATION
APR 20 2018
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
WEDBUSH SECURITIES, INC. and No. 16-73284
EDWARD WILLIAM WEDBUSH,
SEC No. 3-16329
Petitioners, Securities & Exchange
Commission
v.
U.S. SECURITIES & EXCHANGE MEMORANDUM*
COMMISSION,
Respondent.
On Petition for Review of an Order of the
Securities & Exchange Commission
Submitted April 9, 2018**
Pasadena, California
Before: BOGGS,*** BYBEE, and WATFORD, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Danny J. Boggs, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
Page 2 of 3
1. Substantial evidence supports the Securities & Exchange Commission’s
finding that Edward Wedbush failed to reasonably supervise the regulatory filings
of Wedbush Securities. See 15 U.S.C. § 78y(a)(4). Throughout the relevant
period, Wedbush was the firm’s president and, for part of the period, he was also
its chief compliance officer and the manager of the business-conduct department.
As such, Wedbush had ultimate responsibility for the firm’s regulatory
compliance. Because Wedbush was on notice as to the firm’s continuing failure to
satisfy its regulatory requirements, he was liable for ensuring its compliance.
2. The Commission did not abuse its discretion in affirming Wedbush’s
suspension. The Commission found that the firm’s violations were egregious, and
the sanctions were intended to gain Wedbush’s specific compliance. The sanctions
therefore were not “unwarranted in law or without justification in fact.” Ponce v.
SEC, 345 F.3d 722, 740 (9th Cir. 2003).
3. The Commission correctly concluded that Wedbush and the firm received
a fair hearing. In its complaint, FINRA’s Enforcement Department requested
sanctions under FINRA Rule 8310(a), which lists suspension among the range of
possible sanctions. In addition, the FINRA Sanction Guidelines expressly
contemplate a suspension of up to 30 business days. Wedbush therefore had fair
notice of the sanctions he ultimately received.
Page 3 of 3
PETITION FOR REVIEW DENIED.