Wells Terminates Three Brokers Over Past Insurance Sales
Wells Fargo Advisors has fired at least three brokers in California and Florida based on allegations of improper insurance sales practices that stretched as far back as 2011, according to Central Registration Depository records.
A Wells Fargo spokeswoman declined to comment on the discharges, or address what sparked the investigations, which appear to reflect the ongoing clean-up almost five years after the company’s fake account scandal in 2016 and subsequent settlements.
The brokers discharged in January included: Aaron David Stevens, who was registered as a broker at Wells Fargo Advisors for 13 years in its Boynton Beach, Florida office, and currently is registered with LPL Financial; Michelle Hasten, who was with WFA for eight years in San Diego, California, and currently is not registered; and Justin Dorado, who was with WFA for six years in Fontana, California, and currently is not registered.
A brokerage industry recruiter who spoke on condition of anonymity said he knew of a fourth broker discharged in Dallas in recent months over similar violations of improper rental insurance sales credits and speculated that Wells Fargo may have been uncovering older allegations as it reached out to customers to make remediation efforts tied to regulatory settlements.
“They were reviewing some of the sales activities from that period of time [to see] if clients are saying they didn’t realize what they were doing, or they feel bamboozled,” the recruiter said.
Since Wells Fargo Bank’s fake account scandal came to light in 2016, regulators have been focused on commission- and sales-credit-seeking wrongdoing, including improper insurance sales at the consumer bank.
Wells Fargo in March 2018 agreed to pay $1 billion to settle with U.S. regulators who said “the bank wrongly layered insurance on hundreds of thousands of drivers and routinely hit homebuyers with excessive fees,” as Reuters reported. In 2019, it agreed to pay $386 million over sales of unwanted auto insurance, according to another Reuters report.
Stevens was terminated after Wells Fargo found he received referral credit for 10 policies that closed within 180 days of being opened, according to the U5 filing available through state securities regulators.
Hasten’s violations related to an unspecified number of insurance referrals made in March 2011 that were cancelled “shortly” after being issued, according to the U5.
Dorado in 2015 “referred two bank co-workers to an insurance carrier and received referral sales credit,” according to the filing.
Dorado and Stevens each did not respond to a message through LinkedIn. Hasten could not be reached.
The reasons for the brokers’ terminations do not appear on their BrokerCheck records but are available through state securities regulators. The Financial Industry Regulatory Authority does not require disclosures be reported on BrokerCheck unless they are related to violations of investment law, regulations, or industry standards of conduct.
Wells Fargo noted in the U5s that the violations were not securities related or did not involve allegations of losses.
Wells Fargo in November was ordered to expunge the record of a former Atlanta-based private banker Amy K. Webster who was fired in March 2020 over allegedly enrolling customers into rental insurance policies without authorization. The arbitrator in the case said the disclosure was defamatory and also ordered Wells to pay Webster’s $30,000 in attorneys’ fees.
“They launched some kind of investigation in 2018 and hung a lot of junior branch level employees out to dry in effort to claw back some goodwill with regulators and the public at large. Wells aggressively marked up advisors’ Form U5s,” Robert Herskovits, Webster’s lawyer, told AdvisorHub at the time of the arbitrator’s ruling.