Defendant Name: Wells Fargo Clearing Services, LLC

Defendant Type: Subsidiary of Public Company

Document Reference: 2020-43

Document Details

Legal Case Name In the Matter of Wells Fargo Clearing Services, LLC, and Wells Fargo Advisors Financial Network, LLC
Document Name SEC Charges Wells Fargo In Connection With Investment Recommendation Practices
Document Date 27-Feb-2020
Document Format Administrative Proceeding
File Number 3-19714
Allegation Type Investment Advisers/Investment Companies
Document Summary The SEC "announced settled charges against Wells Fargo Clearing Services and Wells Fargo Advisors Financial Network for failing reasonably to supervise investment advisers and registered representatives who recommended single-inverse ETF investments to retail investors, and for lacking adequate compliance policies and procedures with respect to the suitability of those recommendations. The SEC ordered Wells Fargo to pay a $35 million penalty, which will be distributed to harmed investors."

Disgorgement & Penalty Information

Resolutions
Cease and Desist Order
Censured
Monetary Penalties:

Wells Fargo agreed to pay a $35 million penalty

(Penalty was noted in document, but no amount was listed)

Related Documents:

34-88295 27-Feb-2020 Administrative Proceeding
Order Instituting Administrative and Cease-And-Desist Proceedings, Pursuant to Section 15(b)(4) of the Securities Exchange Act of 1934 and Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-And-Desist Order
On February 27, 2020, the SEC instituted settled administrative and cease-and-desist proceedings against Wells Fargo Clearing Services, LLC, and Wells Fargo Advisors Financial Network, LLC. The SEC stated: "From April 2012 through September 2019, Wells Fargo recommended that many retail investment advisory clients and brokerage customers (collectively, “clients”) buy and hold single-inverse exchange-traded funds (“single-inverse ETFs”) without having adequate compliance policies and procedures and without providing financial advisors proper training and supervision of single-inverse ETFs. As a result, certain investment adviser representatives and registered representatives (referred to by Wells Fargo as “financial advisors”) made unsuitable recommendations to certain clients."

Other Defendants in Action:

Wells Fargo Advisors Financial Network, LLC