Brokerdealer.com profiled earlier in February the uptick in PE firms hiring younger bankers however, other Wall Street businesses are easing up on hiring bankers and looking for more cybersecurity employees after recent breaches.

Much of the hiring that takes place on Wall Street is, unfortunately, reactive. Junior bankers are replacing pricey seniors while sell-side firms are backfilling seats left vacant by staffers who are jumping to the buy-side. And then of course there is headline chasing, when banks load up on compliance, risk and cyber security pros after news of a big scandal breaks.

And that’s not to say it’s a PR move. When J.P. Morgan discovered a massive breach to its internal network last June, one that reportedly had ties to Russia, it pulled out all the stops to improve its defenses to mitigate against a repeat occurrence. Apparently grown frustrated with a lack of help from the U.S. government, the bank has reportedly been recruiting defense contractors and people with military backgrounds, according to Bloomberg.

J.P. Morgan has already grown headcount within its digital security staff to 1,000, more than double the size of Google’s security group, according to the report. The bank has even built a security services facility in the backyard of the National Security Agency, making it easier to recruit talented defense pros. From the sounds of it, J.P. Morgan has essentially built itself a mini defense agency.

Meanwhile, hiring continues to slow in the front office. Headcount at the 10 biggest investment banks on Wall Street fell for the fourth year in a row in 2014, down 4% to 51,600,according to a new report. Fixed income units took the brunt of the punishment, with banks cutting nearly 10% of front office FICC employees during the year.

Despite a revival in dealmaking, investment banking divisions cut their staff by 1% year-over-year. And that’s with revenue up 6% compared to 2013. With greater needs in the back and middle offices, banks are trying to do more with less when it comes to revenue generators.

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BrokerDealer.com blog post courtesy of extract from tradersmagazine.com and John D’Antona Jr.  

The Financial Industry Regulatory Authority (FINRA) announced Monday that it has filed a complaint against Los Angeles-based Wedbush Securities Inc. for systemic supervisory and anti-money laundering (AML) violations in connection with providing direct market access and sponsored access to broker-dealers and non-registered market participants.

During the period at issue, Wedbush was one of the securities industry’s largest market access providers, which included overseas high-frequency, high-volume, algorithmic day-trading firms, and made millions of dollars from its market access business.

The complaint alleges that from January 2008 through August 2013, Wedbush failed to dedicate sufficient resources to ensure appropriate risk management controls and supervisory systems and procedures. This enabled its market access customers to flood U.S. exchanges with thousands of potentially manipulative wash trades and other potentially manipulative trades, including manipulative layering and spoofing.

Despite its obligations to monitor, review, and detect suspicious and potentially manipulative trades, Wedbush largely relied on its market access customers to self-monitor and self-report such trading without sufficient oversight and controls to detect “red flags.”

FINRA also alleges that despite receiving notice of regulatory and compliance risks associated with its market access business – including published industry-wide notices, disciplinary decisions taken against other industry participants and multiple self-regulatory organization inquiries and examinations – Wedbush’s regulatory risk management controls and supervisory procedures were not reasonably designed to manage such risks, and, in fact, created incentives that rewarded Wedbush compliance personnel with compensation based on market access customer trading volume. Additionally, the complaint alleges that the firm failed to establish, maintain and enforce adequate AML policies and procedures, and failed to report suspicious and potentially manipulative transactions.

The issuance of a disciplinary complaint represents the initiation of a formal proceeding by FINRA in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint. Under FINRA rules, a firm or individual named in a complaint can file a response and request a hearing before a FINRA disciplinary panel. Possible remedies include a fine, censure, suspension or bar from the securities industry, disgorgement of gains associated with the violations and payment of restitution.

FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States.

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