Timothy J. Scherwa, who until recently worked as a stockbroker for Wells Fargo Clearing Services, LLC, in Morris Plains, New Jersey, has been accused of taking discretion in non-discretionary customer accounts while he was employed by Wells Fargo.
Regulatory records indicate that Mr. Scherwa worked for Wells Fargo as a financial advisor from May 9, 2014, through October 26, 2017. On December 14, 2017, Mr. Scherwa started working for a different brokerage firm, Capitol Securities Management, Inc. Prior to joining Wells Fargo in 2014, Mr. Scherwa was associated for many years with Morgan Stanley and its predecessors. Mr. Scherwa started working in the securities industry in 1996.
On October 14, 2017, Wells Fargo reported to FINRA that Mr. Scherwa had been accused of taking discretion in non-discretionary customer accounts.
Most brokerage firm accounts are non-discretionary, meaning that a financial advisor must get a client’s permission prior to making any trades in the account. By contrast, in a discretionary account, the customer has signed paperwork giving the financial advisor the authority to make securities purchases and sales without having to obtain the client’s permission before making each trade.
A broker who improperly takes discretion in a non-discretionary account may be found to have engaged in unauthorized trading, which is strictly prohibited under securities industry rules.
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