In re Wells Fargo Securities

 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 98076 / August 8, 2023 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-21552 
 
In the Matter of 
 
Wells Fargo Securities, LLC, 
Wells Fargo Clearing Services, 
LLC, and Wells Fargo 
Advisors Financial Network, 
LLC, 
 
Respondents. 
 
 
 
 
ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS 
PURSUANT TO SECTIONS 15(b) AND 21C 
OF THE SECURITIES EXCHANGE ACT OF 
1934, MAKING FINDINGS, AND IMPOSING 
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER  
   
 
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange 
Act”), against Wells Fargo Securities, LLC, Wells Fargo Clearing Services, LLC, and Wells Fargo 
Advisors Financial Network, LLC (collectively “Respondents” or “Wells Fargo”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondents have submitted Offers 
of Settlement (“Offers”)   that the Commission has determined to accept. Respondents admit the 
facts set forth in Section III below, acknowledge that their conduct violated the federal securities 
laws, admit the Commission’s jurisdiction over them and the subject matter of these proceedings 
and consent to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings 
Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, and 
Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below. 

2 
III. 
 
 On the basis of this Order and Respondents’ Offers, the Commission finds
1
 that: 
 
Summary 
 
1. The federal securities laws impose recordkeeping requirements on broker-dealers to 
ensure that they responsibly discharge their crucial role in our markets. The Commission has long 
said that compliance with these requirements is essential to investor protection and the 
Commission’s efforts to further its mandate of protecting investors, maintaining fair, orderly, and 
efficient markets, and facilitating capital formation. 
 
2. These proceedings arise out of the widespread and longstanding failure of 
Respondents’ employees and affiliated representatives (“personnel”) throughout Wells Fargo, 
including at senior levels, to adhere to certain of these essential requirements and the Respondents’ 
own policies. Using their personal devices, these personnel communicated both internally and 
externally by personal text messaging platforms (“off-channel communications”). 
 
3. From January 2019 to September 2022, Respondents’ personnel sent and received 
off-channel communications that related to the business of the broker-dealers operated by 
Respondents. Respondents did not maintain or preserve the substantial majority of these written 
communications. Respondents’ failure was firm-wide, and involved personnel at all levels of 
authority. As a result, Respondents violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) 
thereunder. 
 
4. Respondents’ supervisors, who were responsible for supervising junior personnel, 
routinely communicated off-channel using their personal devices. In fact, managing directors and 
senior supervisors responsible for supervising junior personnel, themselves failed to comply with 
Respondents’ policies by communicating using non-approved methods on their personal devices 
about the Respondents’ broker-dealer business. 
 
5. Respondents’ widespread failure to implement their policies and procedures that 
prohibit such communications led to their failure to reasonably supervise their personnel within the 
meaning of Section 15(b)(4)(E) of the Exchange Act. 
 
6. During the time period that Respondents failed to maintain and preserve off-channel 
communications their personnel sent and received related to the broker-dealers’ business, 
Respondents received and responded to Commission subpoenas for documents and records requests 
in numerous Commission investigations. As a result, Respondents’ recordkeeping failures likely 
impacted the Commission’s ability to carry out its regulatory functions and investigate violations of 
the federal securities laws across these investigations. 
 
 
1
  The findings herein are made pursuant to Respondents’ Offers of Settlement and are not 
binding on any other person or entity in this or any other proceeding.  
 

3 
7. Commission staff uncovered Respondents’ misconduct after commencing a risk-
based initiative to investigate the use of off-channel and unpreserved communications at broker-
dealers. Respondents have initiated a review of their recordkeeping failures and begun a program of 
remediation. As set forth in the Undertakings below, Respondents will retain an independent 
compliance consultant to review and assess the Respondents’ remedial steps relating to 
Respondents’ recordkeeping practices, policies and procedures, related supervisory practices, and 
employment actions. 
 
Respondents 
 
8. Wells Fargo Securities, LLC, is a Delaware company with its principal office in 
Charlotte, North Carolina and is registered with the Commission as a broker-dealer. It is a wholly-
owned subsidiary of Wells Fargo & Company, a global financial services firm incorporated in 
Delaware and headquartered in San Francisco, California. 
 
9. Wells Fargo Clearing Services, LLC, is a Delaware company with its principal 
office in St. Louis, Missouri and is registered with the Commission as a broker-dealer and 
investment adviser. It is a wholly-owned subsidiary of Wells Fargo & Company. 
 
10. Wells Fargo Advisors Financial Network, LLC, is a Delaware company with its 
principal office in St. Louis, Missouri and is registered with the Commission as a broker-dealer and 
investment adviser. It is a wholly-owned subsidiary of Wells Fargo & Company. 
 
Recordkeeping Requirements under the Exchange Act 
  
11. Section 17(a)(1) of the Exchange Act authorizes the Commission to issue rules 
requiring broker-dealers to make and keep for prescribed periods, and furnish copies of, such 
records as necessary or appropriate in the public interest, for the protection of investors or 
otherwise in furtherance of the purposes of the Exchange Act. 
 
12. The Commission adopted Rule 17a-4 pursuant to this authority. Rule 17a-4 
specifies the manner and length of time that the records created in accordance with other 
Commission rules, and certain other records produced by broker-dealers, must be maintained and 
produced promptly to Commission representatives. The rules adopted under Section 17(a)(1) of the 
Exchange Act, including Rule 17a-4(b)(4), require that broker-dealers preserve in an easily 
accessible place originals of all communications received and copies of all communications sent 
relating to the firm’s business as such. These rules impose minimum recordkeeping requirements 
that are based on standards a prudent broker-dealer should follow in the normal course of business. 
 
13. The Commission previously has stated that these and other recordkeeping 
requirements “are an integral part of the investor protection function of the Commission, and other 
securities regulators, in that the preserved records are the primary means of monitoring compliance 
with applicable securities laws, including antifraud provisions and financial responsibility 
standards.” Commission Guidance to Broker-Dealers on the Use of Electronic Storage Media 
under the Electronic Signatures in Global and National Commerce Act of 2000 with Respect to 
Rule 17a-4(f), 17 C.F.R. Part 241, Exchange Act Rel. No. 44238 (May 1, 2001). 

4 
 
Respondents’ Policies and Procedures 
 
14. Respondents maintained certain policies and procedures designed to ensure the 
retention of business-related records, including electronic communications, in compliance with the 
relevant recordkeeping provisions. 
 
15. Respondents’ personnel were advised that the use of unapproved electronic 
communications methods, including on their personal devices, was not permitted, and they should 
not use personal email, chats, or text-messaging applications for business purposes, or forward 
work-related communications to their personal applications. 
 
16. Messages sent through the Respondents’ approved communications methods were 
monitored, subject to review, and, when appropriate, archived. Messages sent through unapproved 
communications methods, such as iMessage on personnel’s personal devices, were not monitored, 
subject to review, or archived. 
 
17. Respondents’ policies were designed to address supervisors’ supervision of 
personnel’s training in the Respondents’ communications policies and adherence to Respondents’ 
books and recordkeeping requirements. Supervisory policies notified personnel that electronic 
communications were subject to surveillance by Respondents. Respondents had procedures for all 
personnel, including supervisors, requiring annual self-attestation of compliance. 
 
18. Respondents, however, failed to implement a system of follow-up and review to 
determine that their supervisors were reasonably following the Respondents’ policies. While 
permitting personnel to use approved communications methods, including on personal phones, for 
business communications, Respondents failed to implement sufficient monitoring to assure that 
their recordkeeping and communications policies were being followed. 
 
Respondents’ Recordkeeping Failures Across Their Brokerage Business 
 
19. Beginning in September 2021, the Commission staff commenced a risk-based 
initiative to investigate whether broker-dealers were properly retaining business-related messages 
sent and received on personal devices. Respondents cooperated with the investigation by gathering 
communications from the personal devices of an array of senior and other broker-dealer personnel. 
These personnel included senior business unit leadership, investment bankers, and other senior 
executives and employees.   
 
20. The Commission staff’s investigation uncovered pervasive off-channel 
communications at various seniority levels of Respondents’ broker-dealers. The staff requested off-
channel communications data from a sampling of broker-dealer personnel and found that 
substantially all of the individuals had engaged in at least some level of off-channel 
communications that numbered from less than 100 to over a thousand text messages during a two 
to three year period. Overall, these personnel sent and received off-channel communications, 
involving other Wells Fargo personnel, Wells Fargo’s broker-dealer customers, and other 
participants in the securities industry. Within Wells Fargo, significant numbers of industry group 

5 
heads, lead and senior lead investment bankers, and other executives participated in off-channel 
communications. 
 
21. From January 2019 through September 2022, thousands of messages were sent and 
received that concerned Respondents’ broker-dealer business, including investment strategy, 
discussions of investment banking client meetings, and communications about market color, 
analysis, activity trends or events. For example, a head of an investment banking unit and a lead 
trader in investment banking sent and received more than one thousand off channel business-
related messages to Wells Fargo colleagues, investment banking clients, and personnel at other 
financial services firms. Other Wells Fargo executives similarly sent hundreds of text messages.  
Within Wells Fargo, such executives routinely communicated using off-channel communications 
with other managing directors and junior personnel under their supervision. 
 
22. Overall, the voluminous off-channel messages uncovered by the staff’s risk-based 
initiative reflect extensive discussion between and among senior-level Wells Fargo executives and 
employees, customers, investment banking clients, third-party advisers, and other market 
participants about debt and equity underwriting and trading issues. 
 
Respondents’ Failure to Preserve Required Records Potentially  
Compromised and Delayed Commission Matters 
 
23. Between January 2019 and September 2022, Respondents received and responded 
to Commission subpoenas for documents and records requests in numerous Commission 
investigations. By failing to maintain and preserve required records relating to their broker-dealer 
business, Respondents likely deprived the Commission of these off-channel communications in 
various investigations. 
 
Respondents’ Violations and Failure to Supervise 
 
24. As a result of the conduct described above, from at least January 2019 through 
September 2022, Respondents willfully
2
 violated Section 17(a) of the Exchange Act and Rule 17a-
4(b)(4) thereunder, which require broker-dealers to preserve for at least three years originals of all 
communications received and copies of all communications sent relating to their business as such. 
 
25. As a result of the conduct described above, Respondents failed reasonably to 
supervise their personnel with a view to preventing or detecting certain of their personnel’s aiding 
and abetting violations of Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder, 
within the meaning of Section 15(b)(4)(E) of the Exchange Act. 
 
 
2
  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act, 
“‘means no more than that the person charged with the duty knows what he is doing.’” Wonsover 
v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 
1949)).   

6 
Respondents’ Remedial Efforts 
 
26. In determining to accept the Respondents’ Offers, the Commission considered 
remedial steps promptly undertaken by Respondents and cooperation afforded the Commission 
staff. 
 
Undertakings 
 
27. Prior to this action, Respondents enhanced their policies and procedures, and 
increased training concerning the use of approved communications methods, including on personal 
devices, and began implementing significant changes to the technology available to employees and 
other personnel. In addition, Respondents have undertaken to: 
 
28. Compliance Consultant. 
 
a. Respondents shall retain, within thirty (30) days of the entry of this Order, the 
services of an independent compliance consultant (“Compliance Consultant”) that is not 
unacceptable to the Commission staff. The Compliance Consultant’s compensation and 
expenses shall be borne exclusively by Respondents.  
 
b. Respondents will oversee the work of the Compliance Consultant. 
 
c. Respondents shall provide to the Commission staff, within sixty (60) days of 
the entry of this Order, a copy of the engagement letter detailing the Compliance 
Consultant’s responsibilities, which shall include a comprehensive compliance review as 
described below. Respondents shall require that, within ninety (90) days of the date of the 
engagement letter, the Compliance Consultant conduct:  
 
i. A comprehensive review of Respondents’ supervisory, compliance, and 
other policies and procedures designed to ensure that Respondents’ 
electronic communications, including those found on personal electronic 
devices, including without limitation, cellular phones (“Personal Devices”), 
are preserved in accordance with the requirements of the federal securities 
laws. 
 
ii. A comprehensive review of training conducted by Respondents to ensure 
personnel are complying with the requirements regarding the preservation 
of electronic communications, including those found on Personal Devices, 
in accordance with the requirements of the federal securities laws, including 
by ensuring that Respondents’ personnel certify in writing on a quarterly 
basis that they are complying with preservation requirements. 
 
iii. An assessment of the surveillance program measures implemented by 
Respondents to ensure compliance, on an ongoing basis, with the 
requirements found in the federal securities laws to preserve electronic 
communications, including those found on Personal Devices. 

7 
 
iv. An assessment of the technological solutions that Respondents have begun 
implementing to meet the record retention requirements of the federal 
securities laws, including an assessment of the likelihood that Respondents’ 
personnel will use the technological solutions going forward and a review of 
the measures employed by Respondents to track employee usage of new 
technological solutions. 
 
v. An assessment of the measures used by Respondents to prevent the use of 
unauthorized communications methods for business communications by 
employees. This assessment should include, but not be limited to, a review 
of Respondents’ policies and procedures to ascertain if they provide for any 
significant technology and/or behavioral restrictions that help prevent the 
risk of the use of unapproved communications methods on Personal 
Devices (e.g., trading floor restrictions). 
 
vi. A review of Respondents’ electronic communications surveillance routines 
to ensure that electronic communications through approved 
communications methods found on Personal Devices are incorporated into 
Respondents’ overall communications surveillance program.  
 
vii. A comprehensive review of the framework adopted by Respondents to 
address instances of non-compliance by Respondents’ employees with 
Respondents’ policies and procedures concerning the use of Personal 
Devices to communicate about Respondents’ business in the past. This 
review shall include a survey of how Respondents determined which 
employees failed to comply with Respondents’ policies and procedures, the 
corrective action carried out, an evaluation of who violated policies and 
why, what penalties were imposed, and whether penalties were handed out 
consistently across business lines and seniority levels. 
 
d. Respondents shall require that, within forty-five (45) days after completion of 
the review set forth in sub-paragraphs c.i. through c.vii. above, the Compliance Consultant 
shall submit a detailed written report of its findings to Respondents and to the Commission 
staff (the “Report”). Respondents shall require that the Report include a description of the 
review performed, the names of the individuals who performed the review, the conclusions 
reached, the Compliance Consultant’s recommendations for changes in or improvements to 
Respondents’ policies and procedures, and a summary of the plan for implementing the 
recommended changes in or improvements to Respondents’ policies and procedures. 
 
e. Respondents shall adopt all recommendations contained in the Report within 
ninety (90) days of the date of the Report; provided, however, that within forty-five (45) 
days after the date of the Report, Respondents shall advise the Compliance Consultant and 
the Commission staff in writing of any recommendations that Respondents consider to be 
unduly burdensome, impractical, or inappropriate. With respect to any recommendation 
that Respondents consider unduly burdensome, impractical, or inappropriate, Respondents 

8 
need not adopt such recommendation at that time, but shall propose in writing an 
alternative policy, procedure, or disclosure designed to achieve the same objective or 
purpose. 
 
f. As to any recommendation concerning Respondents’ policies or procedures on 
which Respondents and the Compliance Consultant do not agree, Respondents and the 
Compliance Consultant shall attempt in good faith to reach an agreement within sixty (60) 
days after the date of the Report. Within fifteen (15) days after the conclusion of the 
discussion and evaluation by Respondents and the Compliance Consultant, Respondents 
shall require that the Compliance Consultant inform Respondents and the Commission staff 
in writing of the Compliance Consultant’s final determination concerning any 
recommendation that Respondents consider to be unduly burdensome, impractical, or 
inappropriate. Respondents shall abide by the determinations of the Compliance Consultant 
and, within sixty (60) days after final agreement between Respondents and the Compliance 
Consultant or final determination by the Compliance Consultant, whichever occurs first, 
Respondents shall adopt and implement all of the recommendations that the Compliance 
Consultant deems appropriate.  
 
g. Respondents shall cooperate fully with the Compliance Consultant and shall 
provide the Compliance Consultant with access to such of Respondents’ files, books, 
records, and personnel as are reasonably requested by the Compliance Consultant for 
review. 
 
h. Respondents shall not have the authority to terminate the Compliance 
Consultant or substitute another compliance consultant for the initial Compliance 
Consultant, without the prior written approval of the Commission staff. Respondents shall 
compensate the Compliance Consultant and persons engaged to assist the Compliance 
Consultant for services rendered under this Order at their reasonable and customary rates. 
 
i. For the period of engagement and for a period of two years from completion 
of the engagement, Respondents shall not (i) retain the Compliance Consultant for any 
other professional services outside of the services described in this Order; (ii) enter into 
any other professional relationship with the Compliance Consultant, including any 
employment, consultant, attorney-client, auditing or other professional relationship; or 
(iii) enter, without prior written consent of the Commission staff, into any such 
professional relationship with any of the Compliance Consultant’s present or former 
affiliates, employers, directors, officers, employees, or agents acting in their capacity as 
such. 
 
j. The Report submitted by the Compliance Consultant will likely include 
confidential financial, proprietary, competitive business or commercial information. Public 
disclosure of the Report could discourage cooperation, impede pending or potential 
government investigations or undermine the objectives of the reporting requirement. For 
these reasons, among others, the Report and the contents thereof are intended to remain and 
shall remain non-public, except (1) pursuant to court order, (2) as agreed to by the parties in 
writing, (3) to the extent that the Commission determines in its sole discretion that 

9 
disclosure would be in furtherance of the Commission’s discharge of its duties and 
responsibilities, or (4) is otherwise required by law.  
 
29. One-Year Evaluation. Respondents shall require the Compliance Consultant to 
assess Respondents’ program for the preservation, as required under the federal securities laws, of 
electronic communications, including those found on Personal Devices, commencing one year 
after submitting the Report required by Paragraph 28.d above. Respondents shall require this 
review to evaluate Respondents’ progress in the areas described in Paragraph 28.c.i-vii above. 
After this review, Respondents shall require the Compliance Consultant to submit a report (the 
“One Year Report”) to Respondents and the Commission staff and shall ensure that the One Year 
Report includes an updated assessment of Respondents’ policies and procedures with regard to the 
preservation of electronic communications (including those found on Personal Devices), training, 
surveillance programs, and technological solutions implemented in the prior year period. 
 
30. Reporting Discipline Imposed. For two years following the entry of this Order, 
Respondents shall notify the Commission staff as follows upon the imposition of any discipline 
imposed by Respondents, including, but not limited to, written warnings, loss of any pay, bonus, or 
incentive compensation, or the termination of employment, with respect to any employee found to 
have violated Respondents’ policies and procedures concerning the preservation of electronic 
communications, including those found on Personal Devices: at least 48 hours before the filing of a 
Form U-5, or within ten (10) days of the imposition of other discipline.  
 
31. Internal Audit. In addition to the Compliance Consultant’s review and issuance of 
the One Year Report, Respondents will also have their Internal Audit function conduct a separate 
audit(s) to assess Respondents’ progress in the areas described in Paragraph 28.c.i-vii above. After 
completion of this audit(s), Respondents shall ensure that Internal Audit submits a report to 
Respondents and the Commission staff.  
 
32. Recordkeeping. Respondents shall preserve, for a period of not less than six (6) 
years from the end of the fiscal year last used, the first two (2) years in an easily accessible place, 
any record of compliance with these undertakings.  
 
33. Deadlines. For good cause shown, the Commission staff may extend any of the 
procedural dates relating to the undertakings. Deadlines for procedural dates shall be counted in 
calendar days, except that if the last day falls on a weekend or federal holiday, the next business 
day shall be considered to be the last day. 
 
34. Certification. Respondents shall certify, in writing, compliance with the 
undertakings set forth above. The certification shall identify the undertakings, provide written 
evidence of compliance in the form of a narrative, and be supported by exhibits sufficient to 
demonstrate compliance. The Commission staff may make reasonable requests for further evidence 
of compliance, and Respondents agree to provide such evidence. The certification and supporting 
material shall be submitted to Jason H. Lee, Associate Regional Director, Securities and Exchange 
Commission, 44 Montgomery Street, Suite 2800, San Francisco, California, 94104, with a copy to 
the Office of Chief Counsel of the Enforcement Division, no later than sixty (60) days from the 
date of the completion of the undertakings. 

10 
 
IV. 
In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondents’ Offers.  
 
Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act, it is hereby 
ORDERED that: 
 
A. Respondents cease and desist from committing or causing any violations and any 
future violations of Section 17(a) of the Exchange Act and Rule 17a-4 thereunder. 
 
B.  Respondents are censured. 
 
C. Respondents shall comply with the undertakings enumerated in paragraphs 28 to 34 
above. 
 
D. Respondents, jointly and severally, shall, within 14 days of the entry of this Order, 
pay a civil money penalty in the amount of $125,000,000 to the Securities and 
Exchange Commission for transfer to the general fund of the United States 
Treasury, subject to Exchange Act Section 21F(g)(3). If timely payment is not 
made, additional interest shall accrue pursuant to 31 U.S.C. § 3717. 
 
Payment must be made in one of the following ways: 
 
(1) Respondents may transmit payment electronically to the Commission, 
which will provide detailed ACH transfer/Fedwire instructions upon 
request; 
 
(2) Respondents may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondents may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch   
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying Wells Fargo 
Securities, LLC, Wells Fargo Clearing Services, LLC, and Wells Fargo Advisors Financial 
Network, LLC as Respondents in these proceedings, and the file number of these proceedings; a 
copy of the cover letter and check or money order must be sent to Jason H. Lee, Associate 

11 
Regional Director, Securities and Exchange Commission, 44 Montgomery Street, Suite 2800, San 
Francisco, CA, 94104.  
  
E. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes. To preserve 
the deterrent effect of the civil penalty, Respondents agree that in any Related Investor Action, they 
shall not argue that they are entitled to, nor shall they benefit by, offset or reduction of any award 
of compensatory damages by the amount of any part of Respondents’ payment of a civil penalty in 
this action (“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty 
Offset, Respondents agree that they shall, within 30 days after entry of a final order granting the 
Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty 
Offset to the Securities and Exchange Commission. Such a payment shall not be deemed an 
additional civil penalty and shall not be deemed to change the amount of the civil penalty imposed 
in this proceeding. For purposes of this paragraph, a “Related Investor Action” means a private 
damages action brought against Respondents by or on behalf of one or more investors based on 
substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
       Secretary 
 
 
 

UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 98076 / August 8, 2023 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-21552 
 
In the Matter of 
 

Wells Fargo Securities, LLC, 
Wells Fargo Clearing Services, 
LLC, and Wells Fargo 
Advisors Financial Network, 
LLC, 

 
Respondents. 
 
 
 
 

ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS 
PURSUANT TO SECTIONS 15(b) AND 21C 
OF THE SECURITIES EXCHANGE ACT OF 
1934, MAKING FINDINGS, AND IMPOSING 
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER  

   
 
 

I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange 
Act”), against Wells Fargo Securities, LLC, Wells Fargo Clearing Services, LLC, and Wells Fargo 
Advisors Financial Network, LLC (collectively “Respondents” or “Wells Fargo”).   

 
II. 

 
 In anticipation of the institution of these proceedings, Respondents have submitted Offers 
of Settlement (“Offers”) that the Commission has determined to accept. Respondents admit the 
facts set forth in Section III below, acknowledge that their conduct violated the federal securities 
laws, admit the Commission’s jurisdiction over them and the subject matter of these proceedings 
and consent to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings 
Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, and 
Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below. 



2 

III. 
 
 On the basis of this Order and Respondents’ Offers, the Commission finds1 that: 
 

Summary 
 

1. The federal securities laws impose recordkeeping requirements on broker-dealers to 
ensure that they responsibly discharge their crucial role in our markets. The Commission has long 
said that compliance with these requirements is essential to investor protection and the 
Commission’s efforts to further its mandate of protecting investors, maintaining fair, orderly, and 
efficient markets, and facilitating capital formation. 

 
2. These proceedings arise out of the widespread and longstanding failure of 

Respondents’ employees and affiliated representatives (“personnel”) throughout Wells Fargo, 
including at senior levels, to adhere to certain of these essential requirements and the Respondents’ 
own policies. Using their personal devices, these personnel communicated both internally and 
externally by personal text messaging platforms (“off-channel communications”). 

 
3. From January 2019 to September 2022, Respondents’ personnel sent and received 

off-channel communications that related to the business of the broker-dealers operated by 
Respondents. Respondents did not maintain or preserve the substantial majority of these written 
communications. Respondents’ failure was firm-wide, and involved personnel at all levels of 
authority. As a result, Respondents violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) 
thereunder. 

 
4. Respondents’ supervisors, who were responsible for supervising junior personnel, 

routinely communicated off-channel using their personal devices. In fact, managing directors and 
senior supervisors responsible for supervising junior personnel, themselves failed to comply with 
Respondents’ policies by communicating using non-approved methods on their personal devices 
about the Respondents’ broker-dealer business. 

 
5. Respondents’ widespread failure to implement their policies and procedures that 

prohibit such communications led to their failure to reasonably supervise their personnel within the 
meaning of Section 15(b)(4)(E) of the Exchange Act. 

 
6. During the time period that Respondents failed to maintain and preserve off-channel 

communications their personnel sent and received related to the broker-dealers’ business, 
Respondents received and responded to Commission subpoenas for documents and records requests 
in numerous Commission investigations. As a result, Respondents’ recordkeeping failures likely 
impacted the Commission’s ability to carry out its regulatory functions and investigate violations of 
the federal securities laws across these investigations. 

 

 
1  The findings herein are made pursuant to Respondents’ Offers of Settlement and are not 
binding on any other person or entity in this or any other proceeding.  
 



3 

7. Commission staff uncovered Respondents’ misconduct after commencing a risk-
based initiative to investigate the use of off-channel and unpreserved communications at broker-
dealers. Respondents have initiated a review of their recordkeeping failures and begun a program of 
remediation. As set forth in the Undertakings below, Respondents will retain an independent 
compliance consultant to review and assess the Respondents’ remedial steps relating to 
Respondents’ recordkeeping practices, policies and procedures, related supervisory practices, and 
employment actions. 

 
Respondents 

 
8. Wells Fargo Securities, LLC, is a Delaware company with its principal office in 

Charlotte, North Carolina and is registered with the Commission as a broker-dealer. It is a wholly-
owned subsidiary of Wells Fargo & Company, a global financial services firm incorporated in 
Delaware and headquartered in San Francisco, California. 
 

9. Wells Fargo Clearing Services, LLC, is a Delaware company with its principal 
office in St. Louis, Missouri and is registered with the Commission as a broker-dealer and 
investment adviser. It is a wholly-owned subsidiary of Wells Fargo & Company. 

 
10. Wells Fargo Advisors Financial Network, LLC, is a Delaware company with its 

principal office in St. Louis, Missouri and is registered with the Commission as a broker-dealer and 
investment adviser. It is a wholly-owned subsidiary of Wells Fargo & Company. 

 
Recordkeeping Requirements under the Exchange Act 

  
11. Section 17(a)(1) of the Exchange Act authorizes the Commission to issue rules 

requiring broker-dealers to make and keep for prescribed periods, and furnish copies of, such 
records as necessary or appropriate in the public interest, for the protection of investors or 
otherwise in furtherance of the purposes of the Exchange Act. 

 
12. The Commission adopted Rule 17a-4 pursuant to this authority. Rule 17a-4 

specifies the manner and length of time that the records created in accordance with other 
Commission rules, and certain other records produced by broker-dealers, must be maintained and 
produced promptly to Commission representatives. The rules adopted under Section 17(a)(1) of the 
Exchange Act, including Rule 17a-4(b)(4), require that broker-dealers preserve in an easily 
accessible place originals of all communications received and copies of all communications sent 
relating to the firm’s business as such. These rules impose minimum recordkeeping requirements 
that are based on standards a prudent broker-dealer should follow in the normal course of business. 

 
13. The Commission previously has stated that these and other recordkeeping 

requirements “are an integral part of the investor protection function of the Commission, and other 
securities regulators, in that the preserved records are the primary means of monitoring compliance 
with applicable securities laws, including antifraud provisions and financial responsibility 
standards.” Commission Guidance to Broker-Dealers on the Use of Electronic Storage Media 
under the Electronic Signatures in Global and National Commerce Act of 2000 with Respect to 
Rule 17a-4(f), 17 C.F.R. Part 241, Exchange Act Rel. No. 44238 (May 1, 2001). 



4 

 
Respondents’ Policies and Procedures 

 
14. Respondents maintained certain policies and procedures designed to ensure the 

retention of business-related records, including electronic communications, in compliance with the 
relevant recordkeeping provisions. 

 
15. Respondents’ personnel were advised that the use of unapproved electronic 

communications methods, including on their personal devices, was not permitted, and they should 
not use personal email, chats, or text-messaging applications for business purposes, or forward 
work-related communications to their personal applications. 

 
16. Messages sent through the Respondents’ approved communications methods were 

monitored, subject to review, and, when appropriate, archived. Messages sent through unapproved 
communications methods, such as iMessage on personnel’s personal devices, were not monitored, 
subject to review, or archived. 

 
17. Respondents’ policies were designed to address supervisors’ supervision of 

personnel’s training in the Respondents’ communications policies and adherence to Respondents’ 
books and recordkeeping requirements. Supervisory policies notified personnel that electronic 
communications were subject to surveillance by Respondents. Respondents had procedures for all 
personnel, including supervisors, requiring annual self-attestation of compliance. 

 
18. Respondents, however, failed to implement a system of follow-up and review to 

determine that their supervisors were reasonably following the Respondents’ policies. While 
permitting personnel to use approved communications methods, including on personal phones, for 
business communications, Respondents failed to implement sufficient monitoring to assure that 
their recordkeeping and communications policies were being followed. 

 
Respondents’ Recordkeeping Failures Across Their Brokerage Business 

 
19. Beginning in September 2021, the Commission staff commenced a risk-based 

initiative to investigate whether broker-dealers were properly retaining business-related messages 
sent and received on personal devices. Respondents cooperated with the investigation by gathering 
communications from the personal devices of an array of senior and other broker-dealer personnel. 
These personnel included senior business unit leadership, investment bankers, and other senior 
executives and employees.   

 
20. The Commission staff’s investigation uncovered pervasive off-channel 

communications at various seniority levels of Respondents’ broker-dealers. The staff requested off-
channel communications data from a sampling of broker-dealer personnel and found that 
substantially all of the individuals had engaged in at least some level of off-channel 
communications that numbered from less than 100 to over a thousand text messages during a two 
to three year period. Overall, these personnel sent and received off-channel communications, 
involving other Wells Fargo personnel, Wells Fargo’s broker-dealer customers, and other 
participants in the securities industry. Within Wells Fargo, significant numbers of industry group 



5 

heads, lead and senior lead investment bankers, and other executives participated in off-channel 
communications. 

 
21. From January 2019 through September 2022, thousands of messages were sent and 

received that concerned Respondents’ broker-dealer business, including investment strategy, 
discussions of investment banking client meetings, and communications about market color, 
analysis, activity trends or events. For example, a head of an investment banking unit and a lead 
trader in investment banking sent and received more than one thousand off channel business-
related messages to Wells Fargo colleagues, investment banking clients, and personnel at other 
financial services firms. Other Wells Fargo executives similarly sent hundreds of text messages.  
Within Wells Fargo, such executives routinely communicated using off-channel communications 
with other managing directors and junior personnel under their supervision. 

 
22. Overall, the voluminous off-channel messages uncovered by the staff’s risk-based 

initiative reflect extensive discussion between and among senior-level Wells Fargo executives and 
employees, customers, investment banking clients, third-party advisers, and other market 
participants about debt and equity underwriting and trading issues. 

 
Respondents’ Failure to Preserve Required Records Potentially  

Compromised and Delayed Commission Matters 
 

23. Between January 2019 and September 2022, Respondents received and responded 
to Commission subpoenas for documents and records requests in numerous Commission 
investigations. By failing to maintain and preserve required records relating to their broker-dealer 
business, Respondents likely deprived the Commission of these off-channel communications in 
various investigations. 
 

Respondents’ Violations and Failure to Supervise 
 

24. As a result of the conduct described above, from at least January 2019 through 
September 2022, Respondents willfully2 violated Section 17(a) of the Exchange Act and Rule 17a-
4(b)(4) thereunder, which require broker-dealers to preserve for at least three years originals of all 
communications received and copies of all communications sent relating to their business as such. 

 
25. As a result of the conduct described above, Respondents failed reasonably to 

supervise their personnel with a view to preventing or detecting certain of their personnel’s aiding 
and abetting violations of Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder, 
within the meaning of Section 15(b)(4)(E) of the Exchange Act. 
 

 
2  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act, 
“‘means no more than that the person charged with the duty knows what he is doing.’” Wonsover 
v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 
1949)).   



6 

Respondents’ Remedial Efforts 
 

26. In determining to accept the Respondents’ Offers, the Commission considered 
remedial steps promptly undertaken by Respondents and cooperation afforded the Commission 
staff. 

 
Undertakings 

 
27. Prior to this action, Respondents enhanced their policies and procedures, and 

increased training concerning the use of approved communications methods, including on personal 
devices, and began implementing significant changes to the technology available to employees and 
other personnel. In addition, Respondents have undertaken to: 

 
28. Compliance Consultant. 
 

a. Respondents shall retain, within thirty (30) days of the entry of this Order, the 
services of an independent compliance consultant (“Compliance Consultant”) that is not 
unacceptable to the Commission staff. The Compliance Consultant’s compensation and 
expenses shall be borne exclusively by Respondents.  

 
b. Respondents will oversee the work of the Compliance Consultant. 

 
c. Respondents shall provide to the Commission staff, within sixty (60) days of 

the entry of this Order, a copy of the engagement letter detailing the Compliance 
Consultant’s responsibilities, which shall include a comprehensive compliance review as 
described below. Respondents shall require that, within ninety (90) days of the date of the 
engagement letter, the Compliance Consultant conduct:  

 
i. A comprehensive review of Respondents’ supervisory, compliance, and 

other policies and procedures designed to ensure that Respondents’ 
electronic communications, including those found on personal electronic 
devices, including without limitation, cellular phones (“Personal Devices”), 
are preserved in accordance with the requirements of the federal securities 
laws. 
 

ii. A comprehensive review of training conducted by Respondents to ensure 
personnel are complying with the requirements regarding the preservation 
of electronic communications, including those found on Personal Devices, 
in accordance with the requirements of the federal securities laws, including 
by ensuring that Respondents’ personnel certify in writing on a quarterly 
basis that they are complying with preservation requirements. 

 
iii. An assessment of the surveillance program measures implemented by 

Respondents to ensure compliance, on an ongoing basis, with the 
requirements found in the federal securities laws to preserve electronic 
communications, including those found on Personal Devices. 



7 

 
iv. An assessment of the technological solutions that Respondents have begun 

implementing to meet the record retention requirements of the federal 
securities laws, including an assessment of the likelihood that Respondents’ 
personnel will use the technological solutions going forward and a review of 
the measures employed by Respondents to track employee usage of new 
technological solutions. 
 

v. An assessment of the measures used by Respondents to prevent the use of 
unauthorized communications methods for business communications by 
employees. This assessment should include, but not be limited to, a review 
of Respondents’ policies and procedures to ascertain if they provide for any 
significant technology and/or behavioral restrictions that help prevent the 
risk of the use of unapproved communications methods on Personal 
Devices (e.g., trading floor restrictions). 

 
vi. A review of Respondents’ electronic communications surveillance routines 

to ensure that electronic communications through approved 
communications methods found on Personal Devices are incorporated into 
Respondents’ overall communications surveillance program.  

 
vii. A comprehensive review of the framework adopted by Respondents to 

address instances of non-compliance by Respondents’ employees with 
Respondents’ policies and procedures concerning the use of Personal 
Devices to communicate about Respondents’ business in the past. This 
review shall include a survey of how Respondents determined which 
employees failed to comply with Respondents’ policies and procedures, the 
corrective action carried out, an evaluation of who violated policies and 
why, what penalties were imposed, and whether penalties were handed out 
consistently across business lines and seniority levels. 
 

d. Respondents shall require that, within forty-five (45) days after completion of 
the review set forth in sub-paragraphs c.i. through c.vii. above, the Compliance Consultant 
shall submit a detailed written report of its findings to Respondents and to the Commission 
staff (the “Report”). Respondents shall require that the Report include a description of the 
review performed, the names of the individuals who performed the review, the conclusions 
reached, the Compliance Consultant’s recommendations for changes in or improvements to 
Respondents’ policies and procedures, and a summary of the plan for implementing the 
recommended changes in or improvements to Respondents’ policies and procedures. 

 
e. Respondents shall adopt all recommendations contained in the Report within 

ninety (90) days of the date of the Report; provided, however, that within forty-five (45) 
days after the date of the Report, Respondents shall advise the Compliance Consultant and 
the Commission staff in writing of any recommendations that Respondents consider to be 
unduly burdensome, impractical, or inappropriate. With respect to any recommendation 
that Respondents consider unduly burdensome, impractical, or inappropriate, Respondents 



8 

need not adopt such recommendation at that time, but shall propose in writing an 
alternative policy, procedure, or disclosure designed to achieve the same objective or 
purpose. 
 

f. As to any recommendation concerning Respondents’ policies or procedures on 
which Respondents and the Compliance Consultant do not agree, Respondents and the 
Compliance Consultant shall attempt in good faith to reach an agreement within sixty (60) 
days after the date of the Report. Within fifteen (15) days after the conclusion of the 
discussion and evaluation by Respondents and the Compliance Consultant, Respondents 
shall require that the Compliance Consultant inform Respondents and the Commission staff 
in writing of the Compliance Consultant’s final determination concerning any 
recommendation that Respondents consider to be unduly burdensome, impractical, or 
inappropriate. Respondents shall abide by the determinations of the Compliance Consultant 
and, within sixty (60) days after final agreement between Respondents and the Compliance 
Consultant or final determination by the Compliance Consultant, whichever occurs first, 
Respondents shall adopt and implement all of the recommendations that the Compliance 
Consultant deems appropriate.  
 

g. Respondents shall cooperate fully with the Compliance Consultant and shall 
provide the Compliance Consultant with access to such of Respondents’ files, books, 
records, and personnel as are reasonably requested by the Compliance Consultant for 
review. 
 

h. Respondents shall not have the authority to terminate the Compliance 
Consultant or substitute another compliance consultant for the initial Compliance 
Consultant, without the prior written approval of the Commission staff. Respondents shall 
compensate the Compliance Consultant and persons engaged to assist the Compliance 
Consultant for services rendered under this Order at their reasonable and customary rates. 
 

i. For the period of engagement and for a period of two years from completion 
of the engagement, Respondents shall not (i) retain the Compliance Consultant for any 
other professional services outside of the services described in this Order; (ii) enter into 
any other professional relationship with the Compliance Consultant, including any 
employment, consultant, attorney-client, auditing or other professional relationship; or 
(iii) enter, without prior written consent of the Commission staff, into any such 
professional relationship with any of the Compliance Consultant’s present or former 
affiliates, employers, directors, officers, employees, or agents acting in their capacity as 
such. 

 
j. The Report submitted by the Compliance Consultant will likely include 

confidential financial, proprietary, competitive business or commercial information. Public 
disclosure of the Report could discourage cooperation, impede pending or potential 
government investigations or undermine the objectives of the reporting requirement. For 
these reasons, among others, the Report and the contents thereof are intended to remain and 
shall remain non-public, except (1) pursuant to court order, (2) as agreed to by the parties in 
writing, (3) to the extent that the Commission determines in its sole discretion that 



9 

disclosure would be in furtherance of the Commission’s discharge of its duties and 
responsibilities, or (4) is otherwise required by law.  

 
29. One-Year Evaluation. Respondents shall require the Compliance Consultant to 

assess Respondents’ program for the preservation, as required under the federal securities laws, of 
electronic communications, including those found on Personal Devices, commencing one year 
after submitting the Report required by Paragraph 28.d above. Respondents shall require this 
review to evaluate Respondents’ progress in the areas described in Paragraph 28.c.i-vii above. 
After this review, Respondents shall require the Compliance Consultant to submit a report (the 
“One Year Report”) to Respondents and the Commission staff and shall ensure that the One Year 
Report includes an updated assessment of Respondents’ policies and procedures with regard to the 
preservation of electronic communications (including those found on Personal Devices), training, 
surveillance programs, and technological solutions implemented in the prior year period. 

 
30. Reporting Discipline Imposed. For two years following the entry of this Order, 

Respondents shall notify the Commission staff as follows upon the imposition of any discipline 
imposed by Respondents, including, but not limited to, written warnings, loss of any pay, bonus, or 
incentive compensation, or the termination of employment, with respect to any employee found to 
have violated Respondents’ policies and procedures concerning the preservation of electronic 
communications, including those found on Personal Devices: at least 48 hours before the filing of a 
Form U-5, or within ten (10) days of the imposition of other discipline.  

 
31. Internal Audit. In addition to the Compliance Consultant’s review and issuance of 

the One Year Report, Respondents will also have their Internal Audit function conduct a separate 
audit(s) to assess Respondents’ progress in the areas described in Paragraph 28.c.i-vii above. After 
completion of this audit(s), Respondents shall ensure that Internal Audit submits a report to 
Respondents and the Commission staff.  

 
32. Recordkeeping. Respondents shall preserve, for a period of not less than six (6) 

years from the end of the fiscal year last used, the first two (2) years in an easily accessible place, 
any record of compliance with these undertakings.  

 
33. Deadlines. For good cause shown, the Commission staff may extend any of the 

procedural dates relating to the undertakings. Deadlines for procedural dates shall be counted in 
calendar days, except that if the last day falls on a weekend or federal holiday, the next business 
day shall be considered to be the last day. 

 
34. Certification. Respondents shall certify, in writing, compliance with the 

undertakings set forth above. The certification shall identify the undertakings, provide written 
evidence of compliance in the form of a narrative, and be supported by exhibits sufficient to 
demonstrate compliance. The Commission staff may make reasonable requests for further evidence 
of compliance, and Respondents agree to provide such evidence. The certification and supporting 
material shall be submitted to Jason H. Lee, Associate Regional Director, Securities and Exchange 
Commission, 44 Montgomery Street, Suite 2800, San Francisco, California, 94104, with a copy to 
the Office of Chief Counsel of the Enforcement Division, no later than sixty (60) days from the 
date of the completion of the undertakings. 



10 

 
IV. 

In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondents’ Offers.  

 
Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act, it is hereby 

ORDERED that: 
 

A. Respondents cease and desist from committing or causing any violations and any 
future violations of Section 17(a) of the Exchange Act and Rule 17a-4 thereunder. 
 

B.  Respondents are censured. 
 
C. Respondents shall comply with the undertakings enumerated in paragraphs 28 to 34 

above. 
 
D. Respondents, jointly and severally, shall, within 14 days of the entry of this Order, 

pay a civil money penalty in the amount of $125,000,000 to the Securities and 
Exchange Commission for transfer to the general fund of the United States 
Treasury, subject to Exchange Act Section 21F(g)(3). If timely payment is not 
made, additional interest shall accrue pursuant to 31 U.S.C. § 3717. 

 
Payment must be made in one of the following ways: 
 

(1) Respondents may transmit payment electronically to the Commission, 
which will provide detailed ACH transfer/Fedwire instructions upon 
request; 

 
(2) Respondents may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondents may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  

 
Enterprise Services Center 
Accounts Receivable Branch  
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 

 
Payments by check or money order must be accompanied by a cover letter identifying Wells Fargo 
Securities, LLC, Wells Fargo Clearing Services, LLC, and Wells Fargo Advisors Financial 
Network, LLC as Respondents in these proceedings, and the file number of these proceedings; a 
copy of the cover letter and check or money order must be sent to Jason H. Lee, Associate 

http://www.sec.gov/about/offices/ofm.htm


11 

Regional Director, Securities and Exchange Commission, 44 Montgomery Street, Suite 2800, San 
Francisco, CA, 94104.  
  

E. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes. To preserve 
the deterrent effect of the civil penalty, Respondents agree that in any Related Investor Action, they 
shall not argue that they are entitled to, nor shall they benefit by, offset or reduction of any award 
of compensatory damages by the amount of any part of Respondents’ payment of a civil penalty in 
this action (“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty 
Offset, Respondents agree that they shall, within 30 days after entry of a final order granting the 
Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty 
Offset to the Securities and Exchange Commission. Such a payment shall not be deemed an 
additional civil penalty and shall not be deemed to change the amount of the civil penalty imposed 
in this proceeding. For purposes of this paragraph, a “Related Investor Action” means a private 
damages action brought against Respondents by or on behalf of one or more investors based on 
substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 

 
 By the Commission. 
 
 
 

Vanessa A. Countryman 
       Secretary 
 
 
 


	UNITED STATES OF AMERICA
	In the Matter of
	Wells Fargo Securities, LLC, Wells Fargo Clearing Services, LLC, and Wells Fargo Advisors Financial Network, LLC,
	Respondents.
	Respondents