Scott Reed (CRD#: 3007033), a registered representative with First Financial Equity Corporation (CRD#: 16507) in Scottsdale, Arizona, recently resigned from his position with Wells Fargo Clearing Services LLC after the firm alleged that he engaged in selling away, according to his BrokerCheck record accessed on May 15, 2020. Read on to learn more about selling away and Scott Reed’s record as a broker.
On April 7, 2020, Scott Reed voluntarily resigned from his role as a broker with Wells Fargo Clearing Services LLC. What happened to lead to his resignation? The firm alleged that he recommended investment opportunities that were not offered by Wells Fargo Advisors. This is considered “selling away” and is a violation of firm policy and Financial Industry Regulatory Authority (FINRA) rules.
Why is selling away so problematic? Firms have lists of approved securities products that they have vetted as part of a “reasonable basis suitability analysis.” After performing a “customer-specific suitability analysis”, brokers then recommend these products to customers based on a given customer’s unique needs. If a broker begins peddling unapproved securities without their member firm’s knowledge, the situation could set investors up for significant investment losses.
How did Scott Reed engage in selling away? It is not entirely clear, but the Detailed Report of his BrokerCheck record provides one clue. It lists a company called SSR7 LLC. The report states that Scott Reed owns a Mesa, Arizona rental property with his spouse and that he started the business in 2012.
Scott Reed’s recent resignation is not the only disclosure on his BrokerCheck record. He is also involved in a pending customer dispute. On December 18, 2017, customers alleged that Scott Reed recommended unsuitable investments. They also alleged that he failed to diversify their retirement portfolio. If a client’s portfolio is not sufficiently diverse, spreading out risk among different types of investments, a client could incur significant investment losses. The clients are seeking $300,000 in damages; the dispute is pending.
Scott Reed has passed the Series 66 – Uniform Combined State Law Examination, the Series 63 – Uniform Securities Agent State Law Examination, the SIE – Securities Industry Essentials Examination, the Series 7 – General Securities Representative Examination, the Series 10 – General Securities Sales Supervisor – General Module Examination, the Series 9 – General Securities Sales Supervisor – Options Module Examination, and the Series 24 – General Securities Principal Examination. He is licensed to sell securities in Arizona, California, Idaho, Kansas, and Utah.
Over his 20 years in the securities industry, Scott Reed has worked for seven broker-dealers, one of which has been expelled by FINRA. In addition to First Financial Equity Corporation (CRD#: 16507) in Scottsdale, Arizona, he has also worked for:
- Wells Fargo Clearing Services LLC (CRD#: 19616)
- Coastal Equities, Inc. (CRD#: 23769)
- Accelerated Capital Group (CRD#: 41270) — expelled by FINRA on November 26, 2019
- Meridian United Capital LLC (CRD#: 122924)
- Fidelity Brokerage Services LLC (CRD#: 7784)
- Ameritrade (CRD#: 36559)
If Scott Reed was your broker and you have questions about your investments, don’t hesitate to contact the securities attorneys of Fitapelli Kurta to learn more about your investment loss recovery options. Call (877) 238-4175 or email email@example.com for your free case consultation with a securities attorney.