According to FINRA, Wedbush Securities Inc. (CRD #877), based in Los Angeles, California, was censured and fined $425,000 for violations of Rules 605 and 606 of Regulation NMS under the Securities Exchange Act. The firm consented to these sanctions without admitting or denying the findings. FINRA found that the firm published Rule 606 reports that excluded equity and options orders in NMS securities due to data integrity issues, resulting in inaccurate percentages of non-directed orders. The reports also failed to provide an accurate list of the firm's execution venues for options orders and omitted required information about those venues. One broker-dealer was misidentified as an execution venue, and the reports failed to disclose material aspects of the firm's relationships with execution venues, including payment for order flow arrangements. The firm also failed to make its Rule 606 reports available within the required timeframe and failed to notify customers annually about the availability of these reports. FINRA further found that the firm published inaccurate Rule 605 reports regarding its execution of covered orders. As a market center receiving covered orders, the firm published monthly reports that inaccurately stated it had zero covered orders. When the firm discovered and attempted to correct these inaccuracies, the republished reports were also inaccurate because they included orders that were not covered under Rule 605 due to special handling instructions. The firm's supervisory system was found to be inadequate for ensuring compliance with Rules 605 and 606. The firm had no system to supervise its Rule 606 reports or the third-party vendors that prepared them, no processes to review report accuracy, and failed to update its WSPs for nearly two years after the SEC's 2018 regulations requiring more detailed disclosures. For investors, Rules 605 and 606 are essential transparency measures that allow customers and regulators to evaluate the quality of order execution and understand where orders are routed. When firms publish inaccurate reports, investors are unable to make informed decisions about where and how their orders are being handled, which can directly impact the prices they receive.