Wahed appoints former SEC Director to board after $300k fine from SEC

Rick Steves

The values-based trading platform is doubling down on its compliance efforts.

Wahed has appointed former SEC Director Lori A. Richards to its board of directors, the Islamic finance trading platform announced.

The 30-year industry veteran is a securities industry compliance professional and a former Director of the Securities and Exchange Commission.

At the SEC, Richards led the agency’s national examination program and led numerous examination initiatives, resulting in improvements in investor protection and industry compliance.

The appointment of Lori Richards follows recent charges brought forth by the SEC against the New York-based robo-adviser for misleading statements and breaching its fiduciary duty, and for compliance failures related to its Shariah advisory business.

The complaint alleged that Wahed Invest advertised the existence of its own proprietary funds when no such funds existed, and also promised investors that it would periodically rebalance their advisory accounts, but did not do so.

The false statements lasted from September 2018 until July 2019, the agency claims, adding that when Wahed Invest ultimately launched a proprietary ETF in July 2019, it used its clients’ advisory assets to seed the ETF without prior disclosure to clients of any conflicts of interest.

Wahed Invest settled with the SEC without admitting or denying the findings. The investment platform agreed to a cease-and-desist order, to pay a $300,000 penalty, and retain an independent compliance consultant among other undertakings.

Catering to an underserved community of investors

Lori A. Richards received the Presidential Rank Award for Distinguished Service in 2001 (the highest civilian award in the Federal government) and the SEC’s Distinguished Service Award in 2008 (the SEC’s highest award).

Subsequently, Richards worked in the industry as a Principal with PwC and as Chief Compliance Officer of JP Morgan Asset and Wealth Management. Over the past five years she has been engaged in various board governance roles and in support of different non-profit organisations.

Junaid Wahedna, Chief Executive Officer of Wahed, commented: “We welcome Lori Richards to our Board of Directors and look forward to the insight and knowledge that she will bring to the role. Lori has had an impressive career and is a highly regarded compliance specialist with deep industry knowledge. With her regulatory expertise she will be instrumental in helping Wahed to be at the forefront of compliance, as it continues to expand globally.”

“Given our focus on financial inclusion and diversity, we are passionate about establishing a company that reflects the society we are aiming to serve. Therefore, expanding and diversifying our board of directors is very important to us and we are thrilled to have reached this milestone. Lori brings terrific leadership experience and will be a great asset to us.”

Lori Richards commented, “I’m excited to work with Wahed as it brings financial services and wealth management to a large, underserved community of investors — and as it grows and reinforces its controls and compliance programs.”

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