FOR IMMEDIATE RELEASE
Jun 15 2005
Contact: Stacie Temple; David Cosgrove, (573) 526-5076; (573) 751-4704
Carnahan Enters into Consent Order with Wachovia Securities, LLC
The Order requires Wachovia to pay $300,000 to the Missouri Secretary of State's Investor Education and Protection Fund for the alleged failure of Everen Securities, Inc., and First Union Securities, Inc. to supervise an agent in Missouri.
William Ramey Mead, Jr., was a registered agent of Everen Securities, Inc. and First Union Securities, Inc., working in branch offices located in Belleville, Illinois and Clayton, Missouri from 1992 until 2002.
The order alleges that William Ramey Mead, Jr., made unsuitable investment recommendations, but was not disciplined at any time by either Everen or First Union until his employment was terminated in May of 2002.
"Missouri investors should be able to have confidence in broker-dealers registered in Missouri. For this to happen, firms are required to adequately supervise their agents. This office will continue to take action against those agents and firms who do not act appropriately to protect investors," said Carnahan.
Mead failed to document clients' financial status, including annual income, liquid assets, and net worth on a sampling of 38 new account forms completed by him. The order alleges that Mead often encouraged clients not to provide personal financial data, which minimized the supervisor's ability to make an appropriate suitability determination.
Mead is no longer registered to sell securities in Missouri.
Wachovia indicates in the Consent Order that it has enhanced its supervisory procedures in detecting and preventing customer account abuses by its Missouri registered agents relating to the suitability of investment recommendations.
From May, 2002 to October, 2004, Wachovia entered into settlement agreements in excess of $2 million with former clients of Mead.
For more information regarding investments and fraud protection, visit the Secretary of State's web site at www.sos.mo.gov/securities or call the toll free investor hotline at 1-800-721-7996.