Wells Fargo Fined $3.1 Million As FINRA Completes UIT Sweep

Posted on December 15th, 2021 at 1:15 PM
Wells Fargo Fined $3.1 Million As FINRA Completes UIT Sweep

From the Desk of Jim Eccleston at Eccleston Law:

The Financial Industry Regulatory Authority (FINRA) has completed an expansive 5-year sweep of Unit Investment Trust (UIT) sales, which has prompted six firms to pay $16.8 million in restitution payments as well as $6.6 million in fines. 

As the sweep concluded, FINRA agreed to a settlement with two Wells Fargo advisors which agreed to pay $3.1 million in fines and restitution for allegedly failing to supervise improper short-term trading of UITs. FINRA alleged that Wells failed to implement an automated system to detect when UITs were rolled over prior to their maturity dates between July 2013 and June 2018. According to FINRA, Wells completed nearly $27 billion in UIT transactions for at least 123,000 client accounts. 

FINRA’s sweep flagged several firms including Stifel Nicolaus & Co., Cambridge Investment Research, and Oppenheimer & Co. However, Merrill Lynch received the largest penalty, which compelled the firm to pay $11.65 million in fines and restitution. FINRA initiated the UIT sweep after discovering that advisors at Morgan Stanley Wealth Management had completed thousands of improper rollovers in 2016. Later that year, FINRA ordered Morgan Stanley to pay at least $10 million in restitution as well as a $3.25 million fine. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

 

Tags: eccleston, eccleston law, wells fargo, finra

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