Wells Fargo Clearing Services, LLC has agreed to pay a fine of $1.25 million as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

From November 2016 through November 2023, Wells Fargo failed to timely cancel or close out 209 failed inter-dealer transactions in municipal securities totaling approximately $6.5 million and failed to timely deliver I 06 municipal securities totaling approximately $3.8 million, violating MSRB Rule G-12(h).

During the same period, Wells Fargo failed to promptly obtain physical possession or control of 178 short positions totaling approximately $4.1 million resulting from failures to receive municipal securities, violating Securities Exchange Act of 1934 Section 15(c)(3), Exchange Act Rule 15c3-3(d)(2), and FINRA Rule 2010.

Finally, during the same period, Wells Fargo failed to establish and maintain a supervisory system, including written supervisory procedures (WSPs ), reasonably designed to achieve compliance with MSRB Rule G-12(h) and Exchange Act Rule 15c3-3(d)(2). As a result, the firm violated MSRB Rule G-27.

On top of the $1,250,000 fine, the firm has agreed to a censure.