[P]ratt did not provide Wells Fargo with prior written notice or obtain prior approval for his subsequent 18 personal investments. . .
SIDE BAR: Given that Pratt "made about 18 personal investments" from 2009 through 2013, and he "received approval to make a one-time personal investment," it is impossible for the AWC to allege that he "did not provide Wells Fargo with prior written notice or obtain prior approval for his subsequent 18 personal investments." The AWC concedes that at least one of the 18 personal investments (i.e., the first one) was made with the requisite prior notice/approval. Since all the trades cited in the AWC were placed in 2009 through 2013, it would seem incumbent upon FINRA in 2019 to know the exact number of improper "personal investments" that Pratt has been charged with making. "About" 18 just doesn't cut it at this late date.
[B]etween 2009 and 2012, Pratt also solicited six individuals, five of whom were his Wells Fargo customers, to invest approximately $436,000 in shares of Company B, a speculative company. Pratt provided these investors with Company B presentations and arranged for in person meetings between the investors and Company B management. Company B did not succeed.
[P]ratt knew Company A insiders, including a director, a member of the company's Scientific Advisory Board, and a doctor involved in FDA clinical trials. On numerous occasions, Pratt failed to disclose these relationships to the Firm as required.
[D]espite this prohibition, in 2013 and 2014, Pratt continued to seek information from Company A. In response to Pratt's inquiries, Company A insiders sent Pratt documents and emails containing confidential information concerning Company A's ongoing FDA clinical trials, including patient data from the trial, newly discovered data that the company felt warranted a patent, and a confidential timeline of upcoming FDA filings. Pratt disseminated the confidential information he obtained from Company A to several of his Wells Fargo customers.
[O]n December 8, 2014, the Firm filed a Uniform Termination Notice for Securities Industry Registration ("Form U5") reporting that Pratt's employment had been voluntarily terminated on November 11, 2014. On February 11, 2015, Wells Fargo filed an amended Form U5 stating that the Firm's internal review indicated that Pratt had solicited at least one investor in an unapproved private securities transaction.
(a) ApplicabilityNo person associated with a member shall participate in any manner in a private securities transaction except in accordance with the requirements of this Rule.(b) Written NoticePrior to participating in any private securities transaction, an associated person shall provide written notice to the member with which he is associated describing in detail the proposed transaction and the person's proposed role therein and stating whether he has received or may receive selling compensation in connection with the transaction; provided however that, in the case of a series of related transactions in which no selling compensation has been or will be received, an associated person may provide a single written notice.(c) Transactions for Compensation(1) In the case of a transaction in which an associated person has received or may receive selling compensation, a member which has received notice pursuant to paragraph (b) shall advise the associated person in writing stating whether the member:(A) approves the person's participation in the proposed transaction; or(B) disapproves the person's participation in the proposed transaction.(2) If the member approves a person's participation in a transaction pursuant to paragraph (c)(1), the transaction shall be recorded on the books and records of the member and the member shall supervise the person's participation in the transaction as if the transaction were executed on behalf of the member.(3) If the member disapproves a person's participation pursuant to paragraph (c)(1), the person shall not participate in the transaction in any manner, directly or indirectly.(d) Transactions Not for CompensationIn the case of a transaction or a series of related transactions in which an associated person has not and will not receive any selling compensation, a member which has received notice pursuant to paragraph (b) shall provide the associated person prompt written acknowledgment of said notice and may, at its discretion, require the person to adhere to specified conditions in connection with his participation in the transaction.(e) DefinitionsFor purposes of this Rule, the following terms shall have the stated meanings:(1) "Private securities transaction" shall mean any securities transaction outside the regular course or scope of an associated person's employment with a member, including, though not limited to, new offerings of securities which are not registered with the Commission, provided however that transactions subject to the notification requirements of Rule 3050, transactions among immediate family members (as defined in Rule 2790), for which no associated person receives any selling compensation, and personal transactions in investment company and variable annuity securities, shall be excluded.(2) "Selling compensation" shall mean any compensation paid directly or indirectly from whatever source in connection with or as a result of the purchase or sale of a security, including, though not limited to, commissions; finder's fees; securities or rights to acquire securities; rights of participation in profits, tax benefits, or dissolution proceeds, as a general partner or otherwise; or expense reimbursements.
knew Company A insiders, including a director, a member of the company's Scientific Advisory Board, and a doctor involved in FDA clinical trials. On numerous occasions, Pratt failed to disclose these relationships to the Firm as required.
MR. PRATT VOLUNTARILY RESIGNED FROM WELLS FARGO ADVISORS CONCURRENT WITH THE FIRM'S REVIEW OF MR. PRATT'S RELATIONSHIP WITH TWO OUTSIDE COMPANIES, AND CERTAIN CLIENTS INVESTING IN A PRIVATE INVESTMENT NOT ASSOCIATED WITH WELLS FARGO. THE FIRM'S REVIEW OF THIS MATTER WAS NOT PROMPTED BY A CLIENT COMPLAINT.
MY COMPLETELY VOLUNTARY RESIGNATION FROM WELLS FARGO ADVISORS ('WFA") TO JOIN STIFEL NICHOLAS WAS UNRELATED TO ANY INTERNAL REVIEW. I WAS NOT INFORMED OF ANY SUCH REVIEW WHEN IT WAS INITIATED AND WAS TOLD ABOUT IT ONLY ONE BUSINESS DAY BEFORE I RESIGNED, AFTER I HAD BEEN WORKING FOR A MONTH AND A HALF MAKING PLANS TO SWITCH FIRMS. THE DAY BEFORE I LEFT MY MANAGER TRIED TO DISSUADE ME FROM LEAVING BY TELLING ME THERE WAS SUCH A REVIEW. A NUMBER OF YEARS AGO I INVESTED IN SEVERAL PROMISING PRIVATE PLACEMENTS, AS DID A FEW OF MY CLIENTS, SOME OF WHOM BROUGHT SUCH OPPORTUNITIES TO MY ATTENTION. ALL MY PRIVATE PLACEMENTS WERE APPROVED BY PREDECESSOR FIRMS (A.G. EDWARDS AND WACHOVIA) LATER ACQUIRED BY WFA. EACH PRIVATE INVESTMENT WAS ALWAYS FULLY DISCLOSED ANNUALLY TO ALL EMPLOYERS. THESE INVESTMENTS WERE MADE AS FAR BACK AS 2003 AND NONE ARE RECENT. I HAVE VIOLATED NO INDUSTRY RULES, REGULATIONS OR STANDARDS OF CONDUCT AND THE UNCOMPLETED WFA REVIEW HAS NOT FOUND OTHERWISE.