Wells Fargo Stockbroker Barred For Private Securities
Joseph Hersey Pratt II (also known as Joseph Hersey Butcher) of Conshohocken Pennsylvania a stockbroker formerly registered with Wells Fargo has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based in part on findings that Pratt executed private securities transactions during the time that he was employed by Wells Fargo. Letter of Acceptance Waiver and Consent No. 2014043750301 (Sept. 24, 2019).
According to the AWC, during the period in which Pratt was associated with Wells Fargo, stockbrokers were not permitted under Wells Fargo’s policy to engage in any private securities transactions unless the stockbrokers were provided with authorization by the securities broker dealer. Nonetheless, eighteen investments were effected by Pratt through private securities transactions. The AWC stated that Pratt purchased $119,000.00 worth of shares in a speculative company, Company B. Also, five customers of Wells Fargo and one additional investor had been solicited by Pratt to invest in Company B. Those investors acted upon Pratt’s advice and bought $436,000.00 worth of Company B’s shares.
FINRA revealed that investors who purchased Company B shares received presentations by or through Pratt and the stockbroker also facilitated discussions between the managerial personnel at Company B and the investors. Company B went under after the customers made the investments, according to the AWC.
From 2009 to 2012, Pratt’s transactions failed to be authorized by Wells Fargo. Specifically, the firm only permitted Pratt to make one investment in Company B. The securities broker dealer knew nothing about Pratt’s solicitation of its customers regarding their investments in that company. FINRA found Pratt’s private securities transactions to be violative of FINRA Rules 2010 and National Association of Securities Dealers (NASD) Rule 3040.
FINRA Public Disclosure confirms that Pratt has been identified in two customer initiated investment related disputes that concern accusations of his misconduct when he was employed by Wells Fargo. Specifically, a customer initiated investment related complaint concerning Pratt’s conduct was settled for $48,547.75 in damages based upon allegations that Pratt failed to disclose the contingent deferred sales charges for mutual fund transactions executed in the customer’s account.
Pratt is also referenced in a customer initiated investment related complaint which was resolved for $20,000.00 in damages on March 27, 2018 supported by accusations that the customer’s assets were placed into aggressive and speculative foreign equities by Pratt which conflicted with the customer’s instructions of avoiding principal risk.
Pratt was terminated by Wells Fargo for effecting undisclosed private securities transactions and maintaining suspicious relationships with two outside companies.