The Financial Industry Regulatory Authority suspended an ex-Wells Fargo broker for six months and fined him $10,000 for allegedly altering documents and using his own personal email address for business activities.
Without admitting or denying the findings, Robert Patton Stansberry signed a letter of acceptance, waiver and consent on July 6 in which he agreed to FINRA’s sanctions. FINRA accepted the letter Thursday.
Stansberry was associated with Wells Fargo Advisors Financial Network, its independent channel, from May 2017 to August 2018. Wells Fargo FiNet filed a Form U5 Uniform Termination Notice discharging him for the infractions cited by FINRA in the fall of 2018.
Stansberry then became associated as a broker with Cutter & Company, from August 2018 to November 2019. That firm filed a Form U5 terminating his registration in late 2019.
Wells Fargo and Cutter did not immediately respond to requests for comment on Friday. Braden Perry, a partner at the law firm Kennyhertz Perry, which represented Stansberry, declined to comment.
“On at least 24 occasions from February 2018 to July 2018, Stansberry instructed 16 … customers to sign incomplete documents and return them to him, with the customers’ understanding that Stansberry would fill in the missing information … consistent with their instructions, but without further verification,” FINRA also alleged.
Stansberry altered documents including IRA beneficiary forms, automated clearing house (or ACH) authorization agreements, account distributions forms and letters of authorization to transfer funds/assets, the regulator claimed.
“In one instance, Stansberry had a customer sign a transfer on death account application, but the customer omitted each beneficiary’s allocation percentage and subsequently died before completing this information,” FINRA alleged.
“As an accommodation, and with the assistance and agreement of the beneficiaries, Stansberry filled in the beneficiary allocation percentages after the customer’s death.” But, due to an ensuing investigation by Wells Fargo of Stansberry’s “document alteration, the beneficiaries incurred delays in the disbursement of their inherited funds,” the regulator claimed.
Background on the Matter
From June 2017 to December 2018, Stansberry used an unauthorized personal email account to communicate with clients regarding business-related matters, FINRA alleged. By doing so, the rep prevented his member firms from preserving the emails as required by Exchange Act Rule 17a-4(b)(4), the regulator claimed.
From February 2018 to July 2018, Stansberry had Wells Fargo clients sign incomplete documents (blank, partially completed or extracted pages from multi-page forms) and return them to him, so he could then fill in information, such as social security numbers and bank routing numbers, on their behalf.
Stansberry then submitted the documents to the firm without verifying the completed information with each customer, according to the regulator. Although the information was unverified, it was not found to be inaccurate or inconsistent with customer instructions, FINRA said.
As a result of his actions, Stansberry violated FINRA Rules 4511 and 2010, the regulator claimed. He is no longer registered as a broker, but is still registered as an RIA, although not currently associated with any FINRA member firm, according to the regulator’s BrokerCheck website.