First Clearing LLC


November 19, 2020

Type of alert:


The Financial Industry Regulatory Authority (FINRA) Department of Enforcement recently approved a Letter of Acceptance, Waiver and Consent (AWC) submitted by First Clearing LLC (n/k/a Wells Fargo Clearing Services, LLC), a brokerage firm that was a FINRA member from May 1986 to November 2016, to resolve violations of securities industry rules.

According to the AWC, First Clearing distributed 6,851 account statements that did not comply with NASD Rule 2340(c) between April 2016 and October 2016. During this time, the firm provided clearing services for 75 firms and approximately 8.2 million customer accounts.

Specifically, the firm sent statements to over 2,300 customers containing noncompliant valuation information for one or more Direct Participation Programs (DPPs) or Real Estate Investment Trusts (REITs) that did not comply with the NASD rule. FINRA also asserts that First Clearing failed to establish and maintain a supervisory system and written supervisory procedures reasonably designed to ensure that its customer account statements “reflected DPP and REIT prices derived from a valuation methodology allowed by NASD Rule 2340(c).” This misconduct also prevented the firm from maintaining accurate books and records relating to quarterly statements for customer accounts that contained DPPs and REITs. Based on the foregoing, First Clearing violated FINRA Rules 4511 and 2010 as well as NASD Rule 2340(c).

By signing the AWC, First Clearing consented to a censure and a $300,000 fine.

Take the next steps to find out if you have a claim:

Step 1.

Talk to an Experienced Attorney Today

Call and speak to one of our attorneys* for a no-cost consultation to discuss your situation, answer your questions, and help you determine the next steps. This call usually takes about 15 minutes, but we are happy to talk to you as long as you would like!

Step 2.

Quick Review of Your Paperwork

If we think you might have a case, we will need to review a few basic documents. If we determine you have a case, then you will have the option to hire us as your attorneys to pursue it.

Step 3.

Signed Attorney/Client Agreement

If you decide to hire us to pursue your case, we will have you sign an attorney-client agreement so we can begin the process of trying to recover your losses.*

*In the vast majority of cases, our agreement is contingent – meaning you won’t owe us any money unless we recover money for you.

Request a Consultation

This site contains attorney advertising. The attorneys at ChapmanAlbin are licensed to practice law in Ohio and Michigan. Any reference to past cases or successes made herein should not be construed as a guarantee of any future outcome. Each client and each client’s case is unique, and no result or outcome is or can ever be guaranteed. The information provided in this website is offered for general information purposes only; it is not offered as and does not constitute legal advice in any way. // Disclaimer