Finra Suspends Ex-Wells Fargo Broker over $600K Bequest
A Tacoma, Washington-based Wells Fargo Advisors broker with 37 years of experience apparently opted to accept a $600,000 bequeathment even though his receipt of those funds may have tarnished his long career’s final chapter.
The broker also violated Finra’s Rule 2010 requiring “high standards” after he “circumvented” his former firm in accepting the bequest, which came from the estate of a long-time client who died in 2014 at the age of 92.
Wells Fargo, which had first warned Wells about his being improperly named as beneficiary in 2012, reversed the initial transfer of funds via wire when the customer died, but the broker proceeded to accept three separate checks from the customer’s estate and then concealed the funds by depositing them into a personal bank account not affiliated with Wells Fargo and attesting on annual compliance questionnaires that he had not received any money.
The broker, who worked for Wells Fargo’s private client group until becoming an independent broker with Wells Fargo Advisors Financial Network in 2015, was ultimately fired in 2019 for “accessing a client’s safe and taking custody of cash contained therein before depositing the cash into the customer’s account” and “accepting a bequest from the estate of a client serviced at a prior firm.”
The settlement did not state how the deposits came to light but noted that the enforcement action “originated from a review conducted in connection with information received by FINRA’s Senior Helpline.”
It said that Wells Fargo had first become aware that the broker was named in the client’s will after the client’s brother complained to the firm about the issue in 2012 and prompted the initial warning.
The ex-broker Wells accepted the sanctions without admitting or denying the findings and could not be reached for comment for this story. His lawyer, Leila Shaver in Atlanta, Georgia, did not return a call about this story or whether the former client’s estate is seeking a return of the funds.
Wells must pay the fine if he attempts to re-enter the brokerage industry, according to the settlement.
A Wells Fargo spokeswoman declined to comment about the Finra-imposed discipline on its former broker.
Wells began his career at Dean Witter Reynolds in Purchase, New York in 1983 and moved to Wells predecessor A.G. Edwards & Sons in Tacoma, Washington in 1996, according to BrokerCheck. He shifted to FiNet in 2015 and remained there until his termination.
In March 2020, Wells joined the Tacoma office of Atlanta-based American Wealth Management, where he was listed as a registered representative until April 16, according to his BrokerCheck record.
In a related proceeding, Washington state’s Department of Financial Institutions’ Securities Division issued in December 2020 a statement of charges against Wells related to the same allegations as Finra acted upon last month. But the state agency also found that in 2014 Wells moved the assets of a different client, a 93-year-old widow, from brokerage into more costly fee-based advisory accounts without “a reasonable basis” for the conversions. The state agency found that, prior to the conversion, the client paid $7,683 on average per year in broker commissions, and after it, $12,467.37 on average per year in advisory fees.
In its statement of charges, the state agency declared its intention to deny Wells’ application to register to represent American Wealth and any other adviser representative or securities salesperson registration application he might seek in the next five years.
The state agency’s division’s enforcement officials said that Wells has sought a hearing about their statement of charges and that proceeding is being scheduled.