FINRA Fines Wells Fargo Second Time in a Month

by Arnab Shome
  • The bank accepted the censure and a fine of $75,000.
FINRA Fines Wells Fargo Second Time in a Month
Bloomberg

The Financial Industry Regulatory Authority (FINRA) has slapped Wells Fargo Clearing Services, LLC with a fresh fine of $75,000 for inconsistencies in data reporting. This is the bank's second fine by the financial watchdog this month.

The California-headquartered bank has already accepted censure and the fine but did not admit or deny any allegations on it.

“This AWC [Letter of Acceptance, Waiver, and Consent] is submitted on the condition that, if accepted, FINRA will not bring any future actions against respondents alleging violations based on the same factual findings described in this AWC,” the official letter already signed by FINRA stated.

According to the allegations, Wells Fargo failed to make accurate order memoranda and transmitted inaccurate reports to the Order Audit Trail System (OATS) between October 1, 2016, and June 12, 2018.

FINRA highlighted that all licensed broker-dealers need to make and keep a memorandum of each brokerage order given or received for the purchase or sale of securities.

For OATS reporting, broker-dealers enter the order details into their systems immediately upon receiving them from customers, and it is automatically appended to other records. In case of a system failure, the firms need to record the order on paper and then manually enter the receipt time into the system.

The regulator alleged that Wells Fargo recorded inaccurate order receipt times on 114,394 order memorandum. It found further reporting violations in Q4 of 2016.

Wells Fargo’s Tussle with FINRA

Earlier this month, FINRA imposed a similar censure and a fine of $300,000 on the same unit of Wells Fargo for sending around 7,000 inaccurate monthly and quarterly account statements to 2,390 customers over seven months.

In September, the self-regulatory organization fined two Wells Fargo subsidiaries over $2 million for supervisory failures due to switching customers’ variable annuities.

The Financial Industry Regulatory Authority (FINRA) has slapped Wells Fargo Clearing Services, LLC with a fresh fine of $75,000 for inconsistencies in data reporting. This is the bank's second fine by the financial watchdog this month.

The California-headquartered bank has already accepted censure and the fine but did not admit or deny any allegations on it.

“This AWC [Letter of Acceptance, Waiver, and Consent] is submitted on the condition that, if accepted, FINRA will not bring any future actions against respondents alleging violations based on the same factual findings described in this AWC,” the official letter already signed by FINRA stated.

According to the allegations, Wells Fargo failed to make accurate order memoranda and transmitted inaccurate reports to the Order Audit Trail System (OATS) between October 1, 2016, and June 12, 2018.

FINRA highlighted that all licensed broker-dealers need to make and keep a memorandum of each brokerage order given or received for the purchase or sale of securities.

For OATS reporting, broker-dealers enter the order details into their systems immediately upon receiving them from customers, and it is automatically appended to other records. In case of a system failure, the firms need to record the order on paper and then manually enter the receipt time into the system.

The regulator alleged that Wells Fargo recorded inaccurate order receipt times on 114,394 order memorandum. It found further reporting violations in Q4 of 2016.

Wells Fargo’s Tussle with FINRA

Earlier this month, FINRA imposed a similar censure and a fine of $300,000 on the same unit of Wells Fargo for sending around 7,000 inaccurate monthly and quarterly account statements to 2,390 customers over seven months.

In September, the self-regulatory organization fined two Wells Fargo subsidiaries over $2 million for supervisory failures due to switching customers’ variable annuities.

About the Author: Arnab Shome
Arnab Shome
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About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6229 Articles
  • 79 Followers

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