Wachovia Units Fined for Notification Failures
March 30, 2009
The Financial Industry Regulatory Authority (Finra), citing systems and operational issues, has fined two former Wachovia Corp. subsidiaries $1.1 million for failure to deliver more than 800,000 notifications to customers.
From 2003 to 2008, Wachovia Securities and First Clearing did not provide more than 300,000 notifications of investment objective changes and about 340,000 for changes of address, according to Finra. More than 54,000 First Clearing customers did not receive notice of the existence of clearing agreements, says Finra, and more than 50,000 did not receive margin disclosure statements. Internal controls procedures and supervisors at the firms--now part of Wells Fargo & Co.--did not catch the violations.
The notifications "help protect against changes that are erroneous, unauthorized, or, in the worst case, indicative of an effort to conceal misconduct involving a customer's account," said Finra chief of enforcement Susan Merrill.
