IFS Securities hit with $10 million trading loss: reports

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. [Recommended video:​ John Rogers strengthened diversity and inclusion efforts well beyond asset management] 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.