The Financial Industry Regulatory Authority (FINRA) of the US has fined and reprimanded a former Wells Fargo advisor for allegedly communicating with customers about bank transactions that were beyond the scope of his authority.

The regulator reprimanded Jack Donnarumma for supposedly masquerading as a Wells Fargo personal banker and bank officer when in fact his role was only an advisor who was not authorised to communicate with clients about letters of credit (L/Cs) and bank guarantees.

Fine and suspension

Donnarumma did not have authority to do anything more than refer customers interested in standby L/Cs or bank guarantees to Wells Fargo Bank, FINRA charged in its settlement with the advisor.

The regulator suspended the former advisor for two years and fined him US$20,000 for the alleged improprieties.

Donnarumma reached a settlement with FINRA in which he neither admitted nor denied the charges but consented to an entry of the regulator's findings.

Accusations

FINRA alleged that Donnarumma falsely stated in an email that Wells Fargo Bank was prepared to close immediately on a standby L/C transaction, when in fact the transaction had not been consummated.

The regulator also accused Donnarumma of continuing to communicate with customers about standby L/Cs and bank guarantees even after his supervisor instructed him not to do so.

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