Wall Street firm Wedbush settles with the SEC, which accused it of ignoring an employee's 'long-running pump-and-dump scheme'

• Wedbush Securities will pay a $250,000 penalty and has agreed to be censured to settle a charge related to what the Securities and Exchange Commission described as an employee's "long-running pump-and-dump scheme."
• The scheme targeted retail investors, the SEC said.
• "After we filed our claim, Wedbush made significant changes aimed at reforming its practices to detect and report misconduct within its ranks," Marc Berger, director of the SEC's New York Regional Office, said in a statement.

The financial-services firm Wedbush Securities settled a charge with the Securities and Exchange Commission on Wednesday related to what the SEC described as an employee's "long-running pump-and-dump scheme targeting retail investors." The agency said Wedbush ignored the scheme and failed to properly investigate.

"Wedbush abandoned important responsibilities to its customers by looking the other way in the face of mounting evidence of manipulative conduct," Marc Berger, director of the SEC's New York office, said in a statement. "After we filed our claim, Wedbush made significant changes aimed at reforming its practices to detect and report misconduct within its ranks."

Wedbush will pay a $250,000 penalty, the SEC said, and has "agreed to be censured" to settle its charge of failing to supervise.

The SEC charged Wedbush in March 2018, saying the broker-dealer "ignored numerous red flags" that indicated the employee was involved in the long-running scheme.

The employee, Timary Delorme, who according to the SEC was an employee of Wedbush from 1981 to 2018, agreed last March to settle fraud charges stemming from the same scheme.

At that time, the SEC called Wedbush a "recidivist broker-dealer," as the charge was the second SEC action against Wedbush in 2018 and the third since 2014.

Wedbush did not respond to a request for comment.

Read more from Markets Insider and Business Insider:

The latest yield curve inversion is yet another warning in the bond market - an expert says it's one of 'four horsemen' predicting recession

Billionaire Nelson Peltz is getting into the cannabis business

Here's what United, Southwest, and American airlines are doing after the US grounded all Boeing 737 Max planes

NOW WATCH: Take a closer look at Bugatti's $19 million La Voiture Noire - the most expensive car ever sold