The Financial Industry Regulatory Authority (“FINRA”) has barred broker Scott Wayne Reed from the securities industry over allegations that Mr. Reed, while associated with Wells Fargo, participated in private securities transactions totaling at least $3.5 million without providing prior written notice to his firm.
Mr. Reed was a financial advisor with Wells Fargo Clearing Services (“Wells Fargo”) in Scottsdale, Arizona, from April 2016 until April 2020. Mr. Reed was permitted to resign after a customer alleged that Mr. Reed recommended and facilitated investment opportunities in investments sold away from and not offered by Wells Fargo.
Wells Fargo appears to have denied any compensation to the complaining customer.
Iorio Altamirano LLP is interested in speaking with customers of Mr. Reed or Wells Fargo. Even if Wells Fargo has previously denied your complaint, contact securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.
FINRA Letter of Acceptance, Waiver, and Consent No. 2020066246901
On February 19, 2021, Mr. Reed and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”). The AWC includes the following factual findings:
- Beginning in early 2019 and continuing until his termination from Wells Fargo in April 2020, Mr. Reed solicited at least six individuals, including at least two Wells Fargo customers, to invest in securities issued by a software and web development company based in Pasadena, California.
- The securities were notes issued by the company to raise capital for its ongoing operations and for investors to profit from the repayments, which included a 15% rate of interest.
- Reed participated in at least $3.5 million in these investments away from the firm by providing written materials about the company to investors and by communicating with them orally, by email and text message about the company and encouraging them to invest.
- Reed also facilitated the transactions by, among other things, helping investors send or receive transfers of funds.
- In one case, Mr. Reed offered to personally guarantee half of an individual’s investment.
- Reed received selling compensation of $191,340 from the company for his role in soliciting and facilitating the investments.
- Reed also personally invested over $200,000 in the company.
- Reed failed to provide Wells Fargo with prior notice or obtain the firm’s advance approval for his participation in these private securities transactions.
- By participating in private securities transactions away from the firm, Mr. Reed violated FINRA Rules 3280 and 2010.
The Arizona Corporation Commission is also investigating Mr. Reed over the same allegations.
Financial Advisor Scott Wayne Reed (CRD No. 3007033)
Mr. Reed has 21 years of experience in the securities industry and has been associated with at least one firm that has been expelled by FINRA. Mr. Reed has been associated with the following firms:
- First Financial Equity Corporation from April 2020 – December 2020.
- Wells Fargo Clearing Services, LLC from April 2016 – April 2020.
- Coastal Equities, Inc. from November 2015 – April 2016.
- Accelerated Capital Group from February 2012 – November 2015 (Expelled by FINRA).
- Meridian United Capital, LLC from November 2010 – February 2012.
- Fidelity Brokerage Services LLC from February 2001 – July 2010.
- Ameritrade from July 1999 – January 2001.
Mr. Reed has been the subject of at least three customer complaints:
- In March 2020, a customer complained that Mr. Reed recommended an investment opportunity in a company not offered by the firm. Upon information and belief, this complaint is what caused Mr. Reed to be terminated by Wells Fargo and barred by FINRA. The customer did not file an arbitration complaint. Instead, the customer complained directly to Wells Fargo, and Wells Fargo inexplicitly denied the complaint.
- In 2017, a customer alleged that Mr. Reed recommended unsuitable oil and gas investments and did not diversify their investment profile. The complaint is still pending.
- In 2010, a customer alleged that Mr. Reed made an unsuitable recommendation related to a mutual fund. The customer did not file an arbitration complaint. Instead, the customer complained directly to the firm that employed Mr. Reed, and the firm denied the complaint.
Wells Fargo: A Duty to Supervise
Financial institutions, like Wells Fargo, must properly supervise financial advisors and customer accounts. Brokerage firms are required to establish and maintain a reasonably designed system to oversee account activity, such as private securities transactions, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.
How to Recover Losses or Obtain a Free Consultation
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.
If you have lost money with broker Scott Reed or Wells Fargo, contact New York securities arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at email@example.com, firstname.lastname@example.org or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a bilingual law firm, fluent in both English and Spanish.