Representing financial professionals, financial institutions and investors in investment loss, employment and disclosure matters, and in regulatory investigations nationwide.

FINRA orders Chicago trader to pay $57 million in fictitious trading case

On Behalf of | Aug 30, 2022 | Investment Loss

The Financial Industry Regulatory Authority has ordered a Chicago securities trader to pay $57 million in a case that involved allegations of fictitious trading, reports Financial Advisor.

A FINRA arbitration panel issued its decision against Keith Wakefield, who was with IFS Securities in Atlanta from 2011 to 2019 and became the company’s managing director and head of fixed income trading.

Wakefield was discharged by the firm after being accused of a fraudulent scheme in which he made fictitious and unauthorized trades. According to the Securities and Exchange Commission, his speculative trades lost millions of dollars but he attempted to cover up the losses by falsifying books and records to make it appear that the trades were actually making profits. His fictitious entries in the records allegedly earned him $820,000 in commissions.

The liquidating trust for IFS said the losses incurred by Wakefield’s trades resulted in the firm going bankrupt.

The claim against Wakefield requested $37 million for the firm’s losses along with damages and attorneys’ fees, and $20 million for third party claims in the bankruptcy proceedings. The FINRA panel decided on the arbitration award in IFS”s favor after Wakefield did not take part in any of the authority’s proceedings pertaining to the case.

Wakefield still faces a criminal trial in the case after being charged with securities fraud by federal prosecutors, who allege that he caused IFS and its counterparts to lose over $30 million. He was also barred by FINRA after failing to appear for testimony in the investigation into his trading improprieties.

The attorneys at Lewitas Hyman are uniquely qualified to represent individual investors in investment-related claims against financial professionals and their firms. We have experience dealing with a broad range of claims that rise to the level of financial advisor misconduct. If you have suffered investment losses as a result of misconduct by your financial professional or their firms, contact Lewitas Hyman at (888) 655-6002 or through our online contact form for a free consultation.