FINRA Fines Wells Fargo Broker For Unauthorized Trading
Gary Raymond Gray of Las Vegas, Nevada, a stockbroker associated with Wells Fargo Clearing Services, has been fined $10,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he effected unauthorized trades in customer accounts and mismarked trading tickets. Letter of Acceptance, Waiver and Consent, No. 2017054543201 (Dec. 18, 2017).
According to the AWC, from April of 2016 to January of 2017, Wells Fargo Clearing Services had written supervisory procedures which restricted stockbrokers from exercising discretion in brokerage accounts that had not been authorized by the firm for purposes of discretionary trading. The procedures reportedly stated that the firm specifically prohibited stockbrokers from exercising price and time-based discretion on a customer’s behalf. Apparently, discretionary trading authority was only permitted when customers maintained an advisory account with the firm.
Evidently, from April of 2016 to January of 2017, discretion had been exercised by Gray in eight of the investment accounts owned by customers, where he effected two-hundred and thirty-six trades. Gray reportedly failed to procure the customers’ written authorization to effect those trades in their accounts on a discretionary basis. Further, the firm never considered those accounts as approved for discretionary trading.
The AWC revealed that Gray had been administered a compliance questionnaire on August 25, 2016, in which he falsely attested to never having exercised discretion in a customer account. FINRA found that Gray’s conduct in that regard was violative of FINRA Rule 2010 and NASD Rule 2510(b).
The AWC additionally stated that twelve customer order tickets had been mismarked by Gray as having been unsolicited when they were actually solicited. Gray reportedly caused the firm to hold records and books that were in violation of Securities Exchange Act of 1934 Section 17(a) and Rule 17(a)-3. FINRA found Gray’s conduct in that regard to be violative of FINRA Rules 2010 and 4511.
FINRA Public Disclosure confirms that on December 15, 2000, a customer initiated investment related written complaint involving Gray’s conduct was settled for $20,556.82 in damages supported by accusations that the customer was not made aware that the certificates of deposits purchased by the customer maintained twenty-year maturities.
Gray’s registration with Wells Fargo Clearing Services, LLC was terminated as of June 7, 2017.
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