Charles D. Shields Jr. of Wayne, Pennsylvania, a stockbroker associated with Wells Fargo Clearing Services LLC, has been fined $5,000.00 and suspended for 15 days from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Shields engaged in unauthorized trading by exercising discretion in a customer’s account without prior written authorization from the customer and without the securities broker dealer having approved the account for discretionary trading. Letter of Acceptance, Waiver, and Consent No. 2020066995301 (September 8, 2023).
According to the AWC, Shields acted based on instructions he received from the customer’s family member in carrying out securities transactions in the customer’s brokerage account. Shields reportedly believed that he was authorized to accept instructions to execute the transactions. He violated FINRA Rule 2010 and NASD Rule 2510(b). Certainly, this is distinguishable from unauthorized trading conducted on the stockbroker’s own initiative. “Discretionary trading” must be in writing, approved by the broker-dealer, and of course, every order needs to be marked “discretion used.” However, here it appears that Shields acted on the authority, or misplaced authority of the wrong person.
FINRA Public Disclosure shows that Shields was referenced in three customer initiated investment related disputes concerning Shields’ conduct while associated with securities broker dealers, including Wells Fargo Clearing Services LLC. On May 29, 2002, a customer from Pennsylvania filed an investment related complaint involving Shields’ conduct in which the customer requested $95,000.00 in damages based on allegations that Shields invested the customer, who had little investment experience, in risky securities. This complaint was denied.
On December 2, 2008, another customer filed an investment related complaint involving Shields’ conduct in which the customer requested $143,000.00 in damages based upon allegations that Shields made unsuitable recommendations and engaged in unauthorized trading. This complaint was closed with no action.
Shields Is the subject of a customer initiated investment related civil action that was settled for $255,000.00 in damages based upon allegations that Shields opened an account without authorization from the customer during the time that Shields was associated with Wells Fargo Clearing Services. Civil Action No. 003961 (June 4, 2021).
Shields was associated with Wells Fargo Clearing Services LLC in Wayne, Pennsylvania, from October 1, 1999, to August 29, 2023.
