FINRA Suspends Former Ä¢¹½´«Ã½lls Fargo Advisor Over Unauthorized Transfer in Elderly Client's Account
From the desk of Jim Eccleston at Ä¢¹½´«Ã½
FINRA has fined and suspended former Ä¢¹½´«Ã½lls Fargo financial advisor Jarrett Thomas after he executed a $50,000 transaction for an elderly client despite being informed that she was no longer capable of managing her finances. InvestmentNews reports that Thomas agreed to a $7,500 fine and a 45-day suspension, but neither admitted nor denied FINRA’s findings, according to the settlement agreement known as an
Acceptance, Waiver and Consent (“AWC”).
Thomas, who began his career with Ä¢¹½´«Ã½lls Fargo Clearing Services in 2008, resigned in June 2023 amid concerns over his handling of the client’s account. In April 2023, a doctor at the client’s long-term care facility formally notified Thomas that she had advanced dementia and could no longer make financial decisions. The client’s Ä¢¹½´«Ã½lls Fargo accounts were held in the name of her living trust, with the firm designated as the successor trustee upon her incapacity or death, according to the AWC.
Despite receiving this notification, Thomas failed to report the client’s condition to Ä¢¹½´«Ã½lls Fargo and, in June 2023, processed a $50,000 transfer from her account based on her oral instructions. Since the client was legally incapacitated, FINRA determined that the transaction was unauthorized. Ä¢¹½´«Ã½lls Fargo only became aware of the issue after Thomas resigned on June 15, 2023, two days after executing the transfer.
In an August 2023 regulatory filing, Ä¢¹½´«Ã½lls Fargo disclosed that Thomas had been the subject of an internal review concerning allegations that he took instructions from an unauthorized third party, failed to maintain accurate records, and did not disclose an outside activity.
According to InvestmentNews, FINRA has previously disciplined advisors for similar misconduct, including cases involving unauthorized trading and excessive transactions that led to significant client losses. With millions of Americans aging into retirement and facing cognitive health challenges, financial professionals must remain vigilant in addressing the fiduciary risks associated with diminished capacity.
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