Former Fifth Third Securities, Inc. broker David Wells (CRD# 6774493) was barred by the SEC related to options trading.
He was registered with Fifth Third Securities, Inc. in Chicago, Illinois, from 2019 to 2021, when he was terminated regarding, “At the time of termination, David Wells admitted misappropriating funds from three clients.” Previously, he was registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated in Mount Prospect, Illinois, from 2017 to 2019.
In September 2021, FINRA barred him indefinitely after he “consented to the sanction and to the entry of findings that he failed to appear for on-the-record testimony or to produce documents requested by FINRA in connection with its investigation into his potential misconduct while at his member firm.”
In September 2022, the United States Securities and Exchange Commission (SEC) alleged that, between October 2020 and July 2021, he “misappropriated over $683,000 from three of his investment advisory clients. Wells fraudulently solicited the clients to give him money to invest on their behalf through Firm A.” The complaint alleges that he “told the clients to purchase cashiers’ checks made out to a corporate entity that he created shortly before misappropriating their funds. Wells then transferred the clients’ funds to personal brokerage accounts owned or controlled by him, where he lost nearly all the funds through risky options trading. Wells also spent some of his clients’ funds on personal expenses.” The SEC alleges that he “accomplished his scheme by making false statements and misleading omissions to the clients about how he planned to invest their money and by creating a shell entity that he used to conceal from his clients that they were writing checks to Wells.” It is alleged that he admitted to engaging in this fraudulent scheme, admitting in his resignation letter in July 2021 that he used clients’ money for “very risky” options trading. It is further alleged that he made material misrepresentations and omissions to investors and misappropriated more than $683,000 in client assets. The SEC sanctioned him to pay $683,000 in disgorgement.
In June 2024, the SEC barred him indefinitely related to penny stock losses. According to the complaint, he “misappropriated over $683,000 from three of his investment advisory clients, fraudulently soliciting the clients to give him money to invest on their behalf, but transferring the funds to a personal brokerage account, where Wells lost most of the funds through risky options trading.”
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Fifth Third Securities, Inc. may be liable for investment or other losses suffered by David Wells’ customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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