Jul 22, 2021
Andrey Blokhin – stock.adobe.com
The financial industry regulator fined and suspended former Wells Fargo Advisors broker who allegedly tried to use a government loan to help small businesses in the wake of the pandemic to fund its self-brokerage account.
Kenrick Sexton, who was a broker at Wells in Charlotte, North Carolina for six years, agreed to a $ 2,500 fine and a one-month suspension, according to a letter from Finra signed Wednesday.
In June 2020, Sexton “inadvertently provided false information” that he was running his self-sufficient Internet merchant account as a sole proprietor and received a $ 1,000 advance loan to cover damages under the agreement.
The Small Business Administration rejected his loan application last July, but Sexton’s misrepresentation violated a Finra 2010 rule prohibiting “any unethical business-related misconduct, whether or not related to a security.”
“Sexton, who was a Wells Fargo registered representative at the time with no outside business disclosure, was not running a business eligible for a small business loan from the SBA,” Finra said.
The AWC letter said Sexton, who did not respond to a request via social media for comment on the story, did not acknowledge or deny Finra’s findings. On his Linked In page, he is now listed as a commercial loans consultant at Charlotte for Dividend America, a division of DPG Investments.
Finra seems to have chalked up Sexton’s negligence to negligence rather than malice.
“Sexton did not review the requirements of the disaster loan program before applying for a loan,” Finra said in a letter.
The SBA on its website defines the purpose of the funds allocated by EIDL: “To cover financial liabilities and operating costs that could have been covered if the disaster had not occurred.”
Finra launched an investigation into Sexton’s loan after Wells Fargo fired him and filed a U5, claiming she fired him after he applied for business support from the Small Business Administration when [he] did not have a pre-existing official business, as required, ”says the letter to Finra.
A Wells Fargo spokesman declined to comment for this story.
According to one industry commentator, Sexton can’t help but hesitate.
Finra’s charges against Sexton fall into the same category as a no-harm and no-harm event on a basketball court, writes Bill Singer, a securities lawyer who blogs about brokers’ legal battles, in a July 22 review. …
“Remarkably, there is nothing in AWC that claims that Sexton knew that he was or intended to engage in any form of fraud – on the contrary, it seems that he might have thought (no matter how careless his state of mind) … appeared) that he had a legal basis for applying for a loan, ”adds Singer.