JPMorgan Chase – Finra Bars Ex-Wells Broker Accused of Improperly Seeking Virus Relief loan

February 12, 2021

Advisorhub/Mason Braswell

The Financial Industry Regulatory Authority has barred a former Wells Fargo bank-based broker who declined to cooperate with its probe into whether she had improperly sought “business support” from the Small Business Administration, according to a letter of settlement finalized Wednesday.

The regulator opened its investigation of Orlando, Florida-based rep Valerie Idarraga Ceballos after she was fired in November 2020 for applying for relief from the S(BA) “when [she] admitted she did not have a pre-existing formal business as required,” according to Finra and Wells’ U5 notice published on her BrokerCheck profile.

The notice does not specify whether Ceballos had specifically applied for the S(BA)’s Paycheck Protection Program or its Economic Injury Disaster loan for coronavirus relief, or whether she ultimately received any funds.

Ceballos could not be reached for comment, and her attorney, Erika Binnix of AdvisorLaw in Westminster, Colorado, did not respond to a request for comment. She settled the charges without admitting or denying the findings.

Wells Fargo fired more than 100 employees in the Fall claiming they personally sought to defraud the government’s Covid-19 virus relief program, according to a report in “NPR” in October.

A company memo said it had identified employees who made false representations in applying for relief funds through the S(BA)’s Economic Injury Disaster loan program and that the employees’ actions were outside of their work responsibilities, according to the report.

A spokeswoman for Wells Fargo did not return a request for comment.

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Ceballos first registered as a broker at Wells Fargo in 2018 and had also worked as a personal banker with Wells Fargo’s Community Bank, according to an August 2017 marketing feature on the company’s “shift from sales to a customer experience culture.” The piece highlighted changes to the company’s processes since its massive fake account scandal came to light in 2016.

“[W]e can enter information and listen and customize much more easily based on where the conversation takes us—instead of worrying if we checked this or that box or mentioned this or that product,” Ceballos said in the piece.

Ceballos’ BrokerCheck record shows no other record of customer disputes or so-called ‘disclosure’ events. Wells noted in the U5 that it found no evidence of customer harm.

Finra in January sent notices to brokers that it is examining certain registered representatives who took aid program funds for coronavirus relief. The regulator is probing whether the recipients had violated federal securities laws or Finra rules, particularly its prohibition on undisclosed outside business activities.

Wells was not the only big bank to find evidence of S(BA) loan abuses. JPMorgan Chase also said it had fired several employees after finding that more than 500 sought loans from the taxpayer-backed program, according to a September report.