Wells Fargo Advisor Who Bilked At Least A Dozen Clients Makes Front-Page News In Today’s New York Times

Monday, January 07, 2013 11:06
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Wells Fargo Advisor Who Bilked At Least A Dozen Clients Makes Front-Page News In Today’s New York Times

Tags: Dodd-Frank | FINRA | fraud

Philip Horn, a Los Angeles-based advisor at Wells Fargo who managed assets for ultra-high-net worth individuals is the subject of a story on the front page of today’s New York Times in a story about a fraud by financial advisors.

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“While Mr. Horn is a relatively minor player in the pantheon of financial fraud, his actions highlight the persistent problems with policing the industry, even after the wave of rules enacted since the collapse of Bernard L. Madoff’s giant Ponzi scheme in 2008,” says the Times.

 

The story is a little strange because Horn’s fraud is not widespread and less than a $1 million in vestors funds are missing. Why cover this fraud, when others of a similar magnitude are occurring?

 

“Every month, the Financial Industry Regulatory Authority, a Wall Street watchdog, penalizes more than 100 brokers for various actions, including unauthorized trading and fraudulent activities, as well as smaller violations,” says the Times. But the story makes no serious effort at providing an understanding of the regulatory debate that’s been raging in Washington over how to regulate financial advisors.

 

Comments (4)

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stvnrsmth
I thought this was terrible reporting. I read the story and couldn't figure out what the fraud was. Did he somehow get money out of the WF accounts? Was it just churning?
stvnrsmth , January 07, 2013
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bramsay
He was shifting winning trades after the fact by cancelling them which I suspect then went through his error account which would book the profits on the trades and he must have then been withdrawing the money.

I bet either Wells Fargo does not have a trade error policy that says that clients keep winning errors, or they don't have systems in place to keep brokers from violating it- I suspect it's the former.
bramsay , January 07, 2013
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brentb843
@bramsay - wow, I think you hit nail on head. how could compliance not have caught this on the first 'error?'

This is a broker-dealer issue all the way.
brentb843 , January 14, 2013
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stvnrsmth
stvnrsmth , March 07, 2013

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