Michael J. Mularski of Mequon, Wisconsin, a stockbroker with Wells Fargo Advisors, LLC, was fined $12,500 and suspended for six months from associating with any Financial Industry Regulatory Authority (FINRA) member firm in all capacities after consenting to findings that he engaged in discretionary trading and unauthorized trading. Letter of Acceptance, Waiver and Consent, No. 2014040884801 (Feb. 3, 2016). Public disclosure records reveal that Wells Fargo Advisors, LLC discharged Mularski on April 4, 2014, in connection with his misconduct.
According to the AWC, between February 2013 and February 2014, a charitable corporation held a securities account at Wells Fargo, where Mularski was the firm’s representative of record on the corporation?s account. The AWC stated that the charitable organization?s chief financial officer provided Mularski with verbal authorization to utilize discretion in order to purchase securities in the corporation?s account, so long as the account held more than $100,000.
The AWC indicated that after Mularski received this verbal authorization, he had effected three hundred fifty-eight transactions on a discretionary basis in the securities account of the charitable organization. The AWC reported that Mularski effected these transactions despite not having any written authority from the customer, as well as not having any written confirmation from Wells Fargo accepting such account as discretionary. Wells Fargo, via the firm’s supervisory procedures, reportedly prohibited the firm?s stockbrokers, such as Mularski, from engaging in discretionary trading in brokerage accounts. FINRA found that as a result of Mularski?s conduct in this regard, he violated NASD Rule 2510(b) as well as FINRA Rule 2010.
The AWC further reported that Mularski engaged in unauthorized trading. In February 2013, the aforementioned charitable organization transferred $3,200,000 into the firm’s securities account. Subsequently, according to the AWC, Mularski used the funds to effect forty-seven transactions in the account between February 2013 and February 2014. The AWC stated that the charitable organization neither knew, nor approved of Mularski’s transactions. Further, Mularski was never provided oral or written authorization to engage in such activity. FINRA therefore found that Mularski had violated FINRA Rule 2010 in this regard.
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