Richard Craig Berg of Chesterfield Missouri a stockbroker formerly employed by Wells Fargo Clearing Services LLC has been fined $10,000.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity supported by accusations that while registered with Wells Fargo Clearing Services: (1) Berg took part in undisclosed private securities transactions involving the purchase of eleven private companies’ securities and (2) Berg participated in outside business activities involving real estate transactions. Letter of Acceptance Waiver and Consent No. 2018058699101 (Oct. 17, 2019).

According to the AWC, from 2003 to 2018, eleven private companies’ securities had been procured by Berg. The AWC stated that a total of $1,251,000.00 was utilized by Berg to effect purchases through a series of twelve transactions. There was no information provided by Berg to Wells Fargo concerning the private company securities purchases until as late as 2018. Wells Fargo was left without any details of Berg’s involvement in the transactions including whether he stood to earn compensation.

FINRA noted that throughout the period that Berg executed these private securities transactions, he was administered four compliance questionnaires. In completing those questionnaires, he failed to disclose any of his private securities transactions. FINRA found Berg’s conduct violative of FINRA Rules 2010 and 3280 as well as National Association of Securities Dealers (NASD) Rule 3040.

Also, the AWC stated that Berg engaged in unapproved outside business activities. Specifically, between November of 2008 and May of 2018, a customer of the firm and Berg joined forces to create a company that would acquire and manage real estate. Allegedly, the company’s focus was profiting from rental properties.

Berg’s activities failed to be within the scope of his employment with Wells Fargo which necessitated his disclosure of the activities to the securities broker dealer. Allegedly, it was not until 2018 that this disclosure was made. Berg had been administered at least five compliance questionnaires which called upon him to disclose any business activities of his occurring outside the firm’s auspices. Berg lied by indicating in the completed questionnaires that all of his outside business activities had been disclosed. FINRA found Berg’s conduct violative of FINRA Rules 2010 and 3270 as well as NASD Rules 2110 and 3030.

FINRA Public Disclosure confirms that Berg was terminated by Wells Fargo on May 16, 2018 amid an investigation into allegations of his concealment of outside activities.

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Guiliano Law Group, P.C.

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