Wells Fargo and LPL Financial Charged for Submitting Deficient Trading Data to SEC

The Securities and Exchange Commission today announced settled charges against Wells Fargo Clearing Services LLC and LPL Financial LLC for failing to provide complete and accurate securities trading information, known as blue sheet data, to the SEC. Wells Fargo and LPL each agreed to pay a $900,000 civil penalty to resolve the SEC's charges. According to the SEC’s orders, over a period of several years, Wells Fargo and LPL each made numerous blue sheet submissions to the SEC that contained inaccurate or missing information about securities transactions and the firms or customers involved in the transactions, as well as other deficiencies. The SEC’s order against Wells Fargo finds that, as a result of approximately 15 types of errors, Wells Fargo made approximately 11,195 blue sheet submissions to the SEC that contained missing or inaccurate data for at least 10.6 million total transactions. The SEC’s order against LPL finds that, as a result of 10 types of errors, LPL made at least 3,679 blue sheet submissions that contained misreported or missing data for at least 399,000 total transactions. The SEC's orders find that Wells Fargo and LPL both engaged in remedial efforts to correct and improve their blue sheet reporting systems and controls, including retaining outside consultants to conduct reviews of their respective blue sheet reporting programs, as well as improving their respective governance frameworks and validation procedures for blue sheet submissions. The orders note that Wells Fargo self-identified and self-reported all but one of the errors affecting its blue sheet submissions. “We use blue sheet data to detect wrongdoing and to protect investors through our enforcement efforts,” said Thomas P. Smith, Jr., Associate Regional Director in the New York Regional Office. “These orders underscore the importance of the obligation to provide accurate and complete blue sheet data to the SEC. Additionally, these resolutions highlight the benefits of self-reporting, remediation, and cooperation when firms detect violations.” The SEC orders find that Wells Fargo and LPL violated the broker-dealer recordkeeping and reporting provisions of the federal securities laws. Wells Fargo and LPL each admitted the findings in the respective orders and agreed to be censured and to each pay a $900,000 penalty. Separately, the Financial Industry Regulatory Authority (FINRA) reached settlements with Wells Fargo and LPL for related conduct. The SEC’s investigation of Wells Fargo was conducted by Eric Taffet and Lindsay S. Moilanen of the New York Regional Office. The SEC’s investigation of LPL was conducted by Zheng (Jane) He, Suzanne M. Bettis, and Ms. Moilanen of the New York Regional Office. Both investigations were supervised by Mr. Smith. The SEC appreciates the assistance of FINRA.

The Securities and Exchange Commission today announced settled charges against Wells Fargo Clearing Services LLC and LPL Financial LLC for failing to provide complete and accurate securities trading information, known as blue sheet data, to the SEC. Wells Fargo and LPL each agreed to pay a $900,000 civil penalty to resolve the SEC's charges. According to the SEC’s orders, over a period of several years, Wells Fargo and LPL each made numerous blue sheet submissions to the SEC that contained inaccurate or missing information about securities transactions and the firms or customers involved in the transactions, as well as other deficiencies. The SEC’s order against Wells Fargo finds that, as a result of approximately 15 types of errors, Wells Fargo made approximately 11,195 blue sheet submissions to the SEC that contained missing or inaccurate data for at least 10.6 million total transactions. The SEC’s order against LPL finds that, as a result of 10 types of errors, LPL made at least 3,679 blue sheet submissions that contained misreported or missing data for at least 399,000 total transactions. The SEC's orders find that Wells Fargo and LPL both engaged in remedial efforts to correct and improve their blue sheet reporting systems and controls, including retaining outside consultants to conduct reviews of their respective blue sheet reporting programs, as well as improving their respective governance frameworks and validation procedures for blue sheet submissions. The orders note that Wells Fargo self-identified and self-reported all but one of the errors affecting its blue sheet submissions. “We use blue sheet data to detect wrongdoing and to protect investors through our enforcement efforts,” said Thomas P. Smith, Jr., Associate Regional Director in the New York Regional Office. “These orders underscore the importance of the obligation to provide accurate and complete blue sheet data to the SEC. Additionally, these resolutions highlight the benefits of self-reporting, remediation, and cooperation when firms detect violations.” The SEC orders find that Wells Fargo and LPL violated the broker-dealer recordkeeping and reporting provisions of the federal securities laws. Wells Fargo and LPL each admitted the findings in the respective orders and agreed to be censured and to each pay a $900,000 penalty. Separately, the Financial Industry Regulatory Authority (FINRA) reached settlements with Wells Fargo and LPL for related conduct. The SEC’s investigation of Wells Fargo was conducted by Eric Taffet and Lindsay S. Moilanen of the New York Regional Office. The SEC’s investigation of LPL was conducted by Zheng (Jane) He, Suzanne M. Bettis, and Ms. Moilanen of the New York Regional Office. Both investigations were supervised by Mr. Smith. The SEC appreciates the assistance of FINRA.