A former customer of Scott Reed, an ex-Wells Fargo Clearing Services broker, has filed a FINRA arbitration claim. The investor claims Reed made them invest more than $2M in unapproved investments. This resulted in the broker making hundreds of thousands of dollars in undisclosed commissions.
FINRA barred Scott Reed in February 2021 for allegedly taking part in $3.5M of private securities transactions. These transactions were made without notifying or getting the approval of his member firm first. This practice is known as selling away.
The self-regulatory organization (SRO) said that Reed solicited individuals to invest in securities from a software and development company. Not only did he facilitate these sales, but he also personally invested $200K in the company.