Jeffry Vargas, a former registered representative employed by Wells Fargo Advisors, LLC, submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he accepted third-party wire transfer orders without prior written authorization from the customer and falsely representing to his member firm that he had verbally confirmed the wire transfers which turned out to be fraudulent requests from an imposter.
Jeffry Benjamin Vargas, of Coral Gables, Florida, allegedly requested that his firm effect a wire transfer based upon a fraudulent email requesting $7,500 be sent to a third-party bank account. FINRA found that Mr. Vargas falsely stated that he had spoken with the client over the phone to verify the client’s identity. The customer’s account lacked sufficient funds for the wire transfer, so the customer’s assistant allegedly instructed Mr. Vargas to sell stock shares in the customer’s account for approximately $53,000 in order to complete the transaction. Again, FINRA found that Mr. Vargas failed to have the customer’s written authorization, but still liquidated the customer’s stocks.
According to FINRA, a second fraudulent email wire request for $52,000 was attempted and, again, Mr. Vargas requested his member firm effect the wire transfer by falsely stating that he had spoken with the customer over the phone. Following the transfer, the customer contacted Mr. Vargas and told him that she had not authorized the wire transfer.
Due to the aforementioned misconduct, FINRA assessed a fine of $5,000 and suspended Mr. Vargas from association with any FINRA member in any capacity for 30 days. The suspension was in effect from January 17, 2017 through February 15, 2017.
FINRA rules require brokerage firms to establish and implement a reasonable supervisory system to protect customers from the risks associated with investing. The implementation of the rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for investment losses which stem from their employees’ misconduct. Therefore, investors who have suffered losses due to a brokerage firm’s failure to supervise its representatives can bring forth claims to recover damages against firms, like Wells Fargo Advisors, which have a duty to supervise employees in order to protect their customers’ interests.
Have you suffered losses in your Wells Fargo Advisors account due to a stockbroker or representative’s misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Wells Fargo Advisors stockbrokers who may have engaged in misconduct and caused investors losses.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at firstname.lastname@example.org for answers to any of your questions about this blog post and/or any related matter.