The Financial Industry Regulatory Authority has fined a former Wells Fargo Clearing Services rep $5,000 and suspended her for six months for providing inaccurate information to her firm when seeking approval to serve as the trustee of a private foundation funded with about $675,000 in assets from a customer’s estate.
According to FINRA's order, Carol Abdo-Brownsberger was registered with FINRA as a general securities rep through an association with Wells Fargo Clearing Services LLC from January 2008 until Dec. 4, 2023, when the firm filed a Form U5 terminating her registration “after allegations she failed to obtain approval prior to opening and directing investments in an outside account and receiving a portion of a deceased client[’]s assets.”
Abdo-Brownsberger also opened a brokerage account for the foundation at a different member firm without prior written consent from Wells Fargo, in violation of FINRA Rules 3210 and 2010.
Wells Fargo’s written supervisory procedures during the period of time relevant to the matter prohibited the firm's reps from accepting bequests or designations as a beneficiary from non-family members unless approved by Wells Fargo based on the facts and circumstances of the request, according to the order.
"One of Abdo-Brownsberger’s customers named beneficiaries for her Wells Fargo accounts that included a charity belonging to a third party with whom Abdo-Brownsberger was acquainted," the order states.
In May 2021, the customer died.
In or around August 2022, Abdo-Brownsberger established a foundation with herself as trustee, the order continues.
"In February 2023, Abdo-Brownsberger’s acquaintance voluntarily transferred approximately $675,000 of the customer’s bequest to fund a foundation that Abdo-Brownsberger had recently established," FINRA said.
"While seeking Wells Fargo’s approval to serve as trustee, Abdo-Brownsberger made inaccurate statements about her responsibilities as trustee and whether her request to serve as trustee arose out of a Wells Fargo customer relationship," according to the order.
Abdo-Brownsberger certified to Wells Fargo that she would not have “direct or indirect control over the investment decisions” for the foundation, the order states.
She opened a brokerage account at another FINRA member for the foundation. "In this account, she had control over investment decisions and in fact made investment decisions on the foundation’s behalf," according to the order.
Abdo-Brownsberger also certified to Wells Fargo that her role as trustee did not “arise out of a Wells Fargo customer or third-party service provider relationship," the order states.
In fact, Abdo-Brownsberger "used the foundation to receive money left by a Wells Fargo customer," FINRA said.
Abdo-Brownsberger accepted and consented to FINRA's findings without admitting or denying them.
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