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Regulatory Sanctions

WWW - Wells Lets Broker Churn Elder's Accounts for 6 Years; On 7th Year They Rested

April 20, 2017

[Photo: by DullHunk (Duncan Hull) / Flickr]


A broker effects 4,000 transactions a year for 7 years for a single retail customer - 93 years of age. Yet, the trading goes unabated until the 7th year, when the broker is U-5'd over the firm's concerns of high trading levels. REALLY? 


Matthew Maczko of Downers Grove, IL, agreed to be barred from the industry to settle FINRA charges that he engaged in excessive trading in an elderly customer’s accounts. Maczko then compounded the matter by providing inaccurate and misleading testimony to FINRA.


BACKGROUND.    Maczko entered the securities industry in I988. In 2008, he joined Wells Fargo Advisors and worked there until September 2016, when he was U-5’d over the firm’s concerns about his level of trading in a customer account.


FACTS AND CIRCUMSTANCES.    According to FINRA, between January 2009 and April 2016, Maczko engaged in excessive trading in 4 accounts of a senior customer, aged 93. Maczko effectively controlled these accounts, which had an average aggregate value of $3 million. During this 7-year period, Maczko effected over 2800 transactions in these accounts, generating nearly $1.1 million in commissions ($581,000), fees ($84,000), and trading losses ($397,000).


Subsequent to his termination from WFA on 9/2/16, Maczko met on 9/28/16 with FINRA staff during on-the-record testimony in violation. During that meeting, Maczko provided inaccurate and misleading testimony to FINRA. He testified that he had not spoken with 2 customers since his termination earlier that month, when in fact his telephone records revealed that he had spoken with these customers several times.


FINANCIALISH COMMENTS.    When Maczko was terminated in 2016, WFA cited that he was "under internal review for adherence to industry standards of conduct based on concerns about the level of trading in a customer account." While it's commendable that the firm - and not FINRA - had apparentlly recognized Maczko's violative actions, the basic question is why it took 6 years to reach this point? [Perhaps Maczko was retained because he was a superstar at marketing Wells Fargo's services to his customers - e.g., bank and credit card accounts.


This case was reported in FINRA Disciplinary Actions for April 2017.

For details on this case, go to … FINRA Disciplinary Actions Online, and refer to Case #2016050430201.