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 second fine on the bank 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 Respondent 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.
The 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 automatically appended to other records. In case of any system failure, the firms need to record the order on paper and then manually have to enter the receipt time into the system.
The regulator alleged that Wells Fargo recorded inaccurate order receipt times on 114,394 order memoranda. It found further reporting violations in Q4 2016 reporting.
Wells Fargo’s Tussle with FINRA
Earlier this month, the 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 for over seven months.
In September, the self-regulatory organization fined two Wells Fargo subsidiaries over $2 million for supervisory failures in the switching of customers’ variable annuities.
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