Enforcement Action Against Former Wells Fargo Advisors Compliance Officer for Altering Document

October 16th, 2014
in econ_news, syndication

from the Securities and Exchange Commission

The Securities and Exchange Commission today announced an enforcement action against a former Wells Fargo Advisors compliance officer who allegedly altered a document before it was provided to the SEC during an investigation.


Follow up:

According to the SEC’s order instituting an administrative proceeding against Judy K. Wolf, she was responsible for identifying potentially suspicious trading by Wells Fargo personnel or the firm’s customers and clients and then analyzing whether the trades may have been based on material nonpublic information. Wolf created a document in September 2010 to summarize her review of a particular Wells Fargo broker’s trading, and she closed her review with no findings. The SEC Enforcement Division alleges that Wolf altered that document in December 2012 afterthe SEC charged the broker with insider trading. By altering the document, Wolf made it appear that she performed a more thorough review in 2010 than she actually had. After Wells Fargo provided the document to the SEC as part of its continuing investigation, SEC enforcement staff spotted the alteration and questioned Wolf specifically about the document. At first she unequivocally denied altering the document after September 2010, but in later testimony she testified that she had done so.

The SEC previously charged Wells Fargo in the case, and the firm agreed to pay $5 million to settle these and other violations of the securities laws. Prior to the enforcement action, Wells Fargo placed Wolf on administrative leave and ultimately terminated her employment. Said Daniel M. Hawke, Chief of the SEC Enforcement Division’s Market Abuse Unit:

We allege that Wolf intentionally altered a trading review document after she knew that the SEC had charged a Wells Fargo employee with insider trading based on facts related to her review. Regardless of her motivation, her conduct was inconsistent with what the SEC expects of compliance professionals and what the law requires.

The SEC Enforcement Division alleges that Wolf, who lives in St. Louis, willfully aided and abetted and caused Wells Fargo to violate Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-4(j) as well as Rule 204(a) under the Investment Advisers Act of 1940.

The SEC Enforcement Division’s investigation was conducted by Megan Bergstrom and David S. Brown of the Market Abuse Unit. The case was supervised by Mr. Hawke, Robert A. Cohen, and Diana Tani. The litigation will be led by Donald Searles.

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