Broker hit with $10 million trading loss on unauthorized trade

Discussion in 'Wall St. News' started by guru, Aug 15, 2019.

  1. guru

    A midsize broker-dealer in Atlanta is facing a potential loss of at least $10 million after its head municipal securities trader made unauthorized trades and shorted Treasury bonds, according to published reports.

    Keith Wakefield, the former municipal securities principal at the firm, IFS Securities Inc., was fired from the firm last week, according to his BrokerCheck profile, amid allegations of "fraud" and "placing fictitious trades." The product in question was government debt, according to BrokerCheck.

    IFS Securities did not have sufficient funds to settle the bond trades, according to the reports.

    Mr. Wakefield, who had worked at IFS since 2011, could not be reached for comment. Juliann Kaiser, a spokesperson for the company, did not return calls Thursday.

    IFS Securities is one of the firms owned by IFS Group Inc. According to the Form ADV for its registered investment adviser, IFS Advisory, the firm has a total of $600.7 million in client assets. IFS Securities has 160 financial advisers, according to its website.

    IFS Securities has reported to the Securities and Exchange Commission and the Financial Industry Regulatory Authority Inc. that the firm "has recently suffered substantial losses as a result of unauthorized securities transactions — not involving customers' assets — perpetrated by one of IFS' Securities most trusted senior employees," according to a statement from the company cited by an article about the financial loss in the Bond Buyer.

    The firm has also reported the matter to the FBI.

    The trading losses raises questions for regulators, including whether IFS Securities properly supervised Mr. Wakefield, the Bond Buyer article noted. According to the broker-dealer's website, IFS Securities caters to two types of businesses: independent advisers, and institutions and municipalities.
    soulfire and ETJ like this.
  2. ETJ


    "Lose a $100.000 you have a problem - lose $10,000,000 and we have a problem."
  3. Make a nice profit - Bonus and "Attaboys."
    Lose a ton - "Unauthorized!"
  4. wrbtrader



    In fact, has there ever been a story reported about an institutional trader being fired after making millions of dollars in profits via "unauthorized trades" ?

    padutrader likes this.
  5. maxinger


    head municipal securities trader made unauthorized trades and shorted Treasury bonds

    my goodness!!! What counter trend trader.
    should buy bond first, sell later and not the other way round.

    If he read the trend correctly, title might be changed to

    Broker rewarded with $10 million trading gain on bond trade