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FINRA Fines and Suspends Former Wells Fargo Broker for Discretionary Trade Violations

Frank Tegge, a registered representative formerly employed with 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 Financial Industry Regulatory Authority’s (FINRA) findings that he exercised discretion in customer accounts without the necessary prior written authorization.

FINRA found that Frank Allen Tegge, of DeWitt, Michigan, failed to obtain the necessary written authorization from his customer or his member firm when he exercised his discretion and placed orders in customer’s accounts.  According to FINRA, Mr. Tegge placed 64 discretionary transactions in two customer accounts without written authorization from the customer.  Further, FINRA found that Mr. Tegge executed a discretionary transaction in another customer’s account without the customer’s prior authorization, placing the trade after speaking with the spouse, who had no authority to authorize any trading in the account. 

FINRA found Mr. Tegge to have violated FINRA Rule 2510(b) and FINRA Rule 2010 for the discretionary transactions described above.  He was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in any capacity for two months.   The suspension was in effect from July 17, 2017 through September 16, 2017.

Stockbrokers, registered representatives, and other financial industry professionals have been known to engage in many types of misconduct which are in violation of industry rules and procedures.  In order to protect customers from misconduct, FINRA rules require brokerage firms to establish and implement a supervisory system.  The implementation of the rules requires that supervisors monitor firm 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 losses resulting from the misconduct.  As a result, account holders who have suffered losses stemming from unauthorized transactions by their broker or registered representative can file a cliam to recover damages against broker-dealers, like Wells Fargo Advisors, which have a duty to supervise its employees in order to prevent stockbroker misconduct.

Have you suffered losses in your Wells Fargo Advisors investment account due to your stockbroker’s unauthorized trades or other stockbroker 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 for unauthorized and prohibited misconduct.

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 post a comment, call (800) 732-2889, send Mr. Pearce an email at pearce@rwpearce.com, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.