Is Wells Fargo type-fraud rampant in the securities industry?

On Thursday, past Securities and Exchange Commission executives were going both ways.

Former SEC Chair Harvey Pitt said he is sure the scam has been going on in brokerages as well as banks.

People go from one (institution) to another and take their bad habits with them, Pitt said while at the Securities Enforcement Forum in Washington, D.C.

Stanley Sporkin, an icon in securities regulation for over half of a century with time as SEC Enforcement Director, a federal judge and a private securities lawyer, agreed.

“I’ve never seen it. If one firm is doing it, the bank regulators and the SEC have to look and see if other big firms are doing it,” said Sporkin.

Taking the opposite view were ex SEC Commissioner Dan Gallagher and a former top SEC official who refused to be quoted by name or title.

Gallagher said it is unlikely that the Wells disease has infected broker-dealers because consumers pay more attention to their brokerage accounts than their bank accounts.

One former top SEC official called Wells Fargo’s push of having salespeople create phony credit cards and press customers into having multiple accounts “a little aberrational.”

He noted high pressure sales tactics have been common in the securities industry for years with boiler rooms and micro-cap stock fraud, but the ex SEC executive doubted large brokerages and investment advisory firms are engaged in similar practices.

However, he said the SEC should investigate whether Wells scams are being conducted in securities companies.