Wells Fargo Fined $1M Over Supervision of Consolidated Client Reports
The Financial Industry Regulatory Authority says that Wells Fargo (WFC) must pay a $1M fine for not having reasonable supervisory systems in place to oversee the generation of consolidated reports for clients. The broker-dealers that were specifically cited were Wells Fargo Advisors Financial Network (WFAFN) and Wells Fargo Advisors (WFA), also referred to as Wells Fargo Clearing Services.They agreed to settle but did not admit or deny the settlement’s findings.
FINRA’s rules mandate that consolidated reports, which are documents that include information about a customer’s financial holdings, even if they are held in different places, must be accurate, clear, and not misleading. According to the regulator, between 6/2009 and 6/2015, the brokerage firms did not enforce supervisory systems for the use of consolidated reports that registered representatives generated via a specific application. During the relevant period, Wells Fargo advisers used the application to create over five million company reports.