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Chesterfield Broker Richard Berg Suspended: Outside Business Activity

Richard Berg (CRD# 1233833), formerly of Wells Fargo, was sanctioned by the Financial Industry Regulatory Authority in connection to allegations he did not promptly notify his firm about his involvement in an outside business activity, and allegations he participated in private securities transactions. Previously registered at the firm’s office in Chesterfield, Missouri, Berg was issued a four-month suspension and a fine of $10,000.

According to a Letter of Acceptance, Waiver and Consent (No. 2018058699101) dated October 2019, Richard Berg was registered with Wells Fargo Clearing Services as a general securities representative when, from November 2008 until at least May 2018, he participated in outside business activities involving the ownership and operation, with a firm client, of “a company engaged in the acquisition and management of rental properties,” and the ownership of a rental property from July 2011 until at least May 2018, which he rented to tenants through a property management company. FINRA states that he received compensation for both of these activities, which fell beyond the scope of his employment of the firm, but he declined to inform the firm of these activities until the beginning of 2018. Furthermore, FINRA states, his failure to notify the firm is “aggravated by the fact that he completed at least five compliance questionnaires during this period incorrectly attesting that he had disclosed all outside activities to the firm.” FINRA found that these activities constituted violations of FINRA Rules 3270, 2010, and 2110.

The AWC Letter states additionally that Richard Berg participated in private securities transactions for which he received compensation. Specifically, FINRA states, he conducted “at least twelve purchases of securities issued by eleven privately-held companies totaling $1,251,000” between 2003 and 2018. FINRA states that he did not inform his firm about the transactions, his involvement in them, and his expectation or receipt of selling compensation, “until he informed Wells Fargo of them in late October 2017 through early 2018.” Again, FINRA states, this failure was aggravated by his attestations on “at least four compliance questionnaires” that he had fully disclosed to the firm his involvement in private securities transactions. FINRA found this conduct to constitute violations of FINRA Rules 3280, 2010, 3040, and 2110.

As a result of the foregoing alleged conduct, Richard Berg was issued a four month suspension and ordered to pay a fine of $10,000.

Richard Berg is currently not registered with any FINRA member firm. His previous registrations include Wells Fargo Clearing Services, Prudential Securities, Lehman Brothers, EF Hutton & Company, and Painewebber. He has passed four securities industry qualifying examinations and currently holds no state securities licenses. (Information current as of April 20, 2020.)

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