Ed Wedbush, fixture of L.A. finance, steps down from his troubled firm
Ed Wedbush, a fixture of L.A.’s finance industry for more than half a century, is stepping down as president of Wedbush Securities, the stock brokerage he co-founded in 1955 that has lately been accused of several irregularities.
Wedbush, 85, will remain chairman of Wedbush Inc., the securities firm’s parent company. The firm said Thursday it will be led by co-presidents Richard Jablonski and Gary Wedbush, the founder’s son.
“I have given much serious thought about this very important and natural advancement for Wedbush Securities, for my own career, and for the many valued services for which our clients depend on our company,” Ed Wedbush said in the company’s statement. “I’m confident that Gary and Rich are ready and able to take on this tremendous challenge and responsibility.”
Wedbush and his firm have weathered immense changes in the financial markets business in the decades since he and colleague Robert Werner founded the company. It started as a mutual fund brokerage, later branched out into investment banking and more recently became a big player in processing stock transactions for high-speed trading firms.
It is one of the only stock brokerages remaining in Los Angeles, surviving the closure of the city’s stock exchange and waves of consolidation that saw other local and regional financial firms bought up by bigger rivals.
But over the last few years, the firm has run afoul of regulators, including the Securities and Exchange Commission, and been hit with numerous lawsuits and fines.
In March, the SEC filed a lawsuit alleging Wedbush Securities ignored or didn’t properly investigate warning signs that a broker was pushing clients to invest in a pump-and-dump scheme. The agency also called Wedbush a “recidivist” for its history of recent problems.
In February, the firm agreed to pay $1 million to settle another SEC suit in which the agency alleged Wedbush had significantly underestimated the amount of cash it needed to hold in an account to pay customers if the firm collapsed.
In that action, the SEC noted Wedbush’s history of compliance issues and said the firm until recently did not have “adequate personnel for a regulated entity of its size and import.”
The company’s lean operations appear to mirror the personal thriftiness of its founder.
In 2010, the elder Wedbush was sued by Los Angeles County over the dilapidated roof on his Ladera Heights home. He told the Times he wanted his employees to know he pinches pennies.
“The image I convey here is that Ed Wedbush watches the expenses,” he said.
And he once advised a Times reporter, “Buy your straw hats in the winter.”
In Thursday’s statement, Wedbush Securities did not give a reason for leadership changes at the company. Eric Wedbush, chairman of Wedbush Securities and another of the founder’s sons, said “management succession planning is a high priority” for the firm.
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