Wilson-Davis & Co., Inc.

The SEC has affirmed FINRA’s findings that Wilson-Davis & Co., Inc. violated Rule 203(b)(1) of Regulation SHO under the Securities Exchange Act of 1934 (Reg SHO) and FINRA Rule 2010 by engaging in short selling without finding locates for 122 short transactions effected in four penny stocks. The SEC also affirmed that the firm did not establish that it was acting as a bona-fide market maker in those stocks. The firm was fined $350,000 in connection with these Regulation SHO violations.

In addition, the SEC affirmed that the firm and its principals failed to reasonably supervise the short sales to ensure compliance with Reg SHO and affirmed that the firm and Snow also violated Reg SHO by failing to devise a reasonable system to supervise the firm’s registered personnel, consider whether an employee should be subject to heightened supervision, and supervise the review of instant messages.

Further, the SEC affirmed that the firm and and its principals failed to establish and implement reasonable anti-money laundering (AML) policies and procedures and conduct adequate AML training. The firm was fined $750,000 in connection with these AML violations.

Full details are contained herein.