Massachusetts Securities Division fined Wells Fargo Clearing Services $450,000 for allowing unregistered agents and supervisors to work with investors in the state, Massachusetts Secretary of State William Galvin announced today.
Some 1,098 Wells Fargo reps and 561 supervisors had a lapse in their Massachusetts registrations, according to the offer of settlement signed by the St. Louis, MO-based firm. That means that more than 10% of the 9,400 brokers and supervisors Wells Fargo currently has registered in the state had lapses in registration.
“Lapses in registration occurred despite the fact that the Securities Division warned Wells Fargo at least 159 times that certain supervisors are required by state regulations to register,” Galvin said.
The registration lapses were discovered by the MA Securities Division during the 30-month period between January 2016 and June 2018.
“We are pleased to have resolved this matter with the Massachusetts Securities Division," Wells Fargo spokeswoman Kim Yurkovich said.
Failure to register reps who are working with MA investors, or reps who supervise brokers who are working with investors in the state, violates state securities laws and regulation and the firm’s own policies, Galvin said.
In several instances cited by the Securities Division, Wells Fargo and its brokers relied on their administrative assistants to renew their MA registrations. One broker told regulators that “registration was not renewed during the annual renewal process in error due to an oversight by my assistant."
In addition to the $450,000 fine paid to the Commonwealth, a censure and a cease and desist order, Wells Fargo has agreed to register its agents conducting securities business in Massachusetts and to review and enhance its own policies and procedures related to registering its agents.