## Facts

- Judy K. Wolf worked in Wells Fargo Advisors, LLC’s compliance department performing insider-trading “look-back” reviews.
- In 2010, Wolf reviewed trading in Burger King securities by a Wells Fargo registered representative shortly before a public acquisition announcement.
- The review reflected suspicious timing and profits but was closed with “no findings” and was not escalated within compliance.
- In 2012, after the SEC began investigating the representative’s Burger King trading, the SEC requested compliance records.
- Wolf revisited her 2010 review log and added new language referencing purported market rumors/news reports that could explain the trading as based on public information.
- The log system recorded the new entry date, creating a mismatch between the date stamp and the implication that the language was part of the original 2010 analysis.
- When questioned by SEC staff, Wolf initially gave an inaccurate explanation about the date stamp, later admitting the addition occurred in 2012.
- Wells Fargo terminated Wolf in 2013; she stated she did not plan to return to the securities industry.

## Issues

1. Whether Wolf willfully aided and abetted and caused Wells Fargo’s violations of Exchange Act § 17(a) and Rule 17a-4(j) and Advisers Act § 204(a) by altering a compliance record and contributing to inaccurate record maintenance and production to the SEC.
2. If liability was established, whether sanctions were warranted in the public interest under Exchange Act §§ 15(b), 21C and Advisers Act §§ 203(f), 203(k).

## Decision

- The ALJ found Wolf willfully aided and abetted and caused Wells Fargo’s recordkeeping and record-production violations.
- The ALJ declined to impose any sanctions, concluding public-interest factors weighed against remedial relief or penalties.

## Legal Principles

- Aiding-and-abetting liability requires a primary violation, substantial assistance by the respondent, and the requisite mental state (knowledge or recklessness, depending on the context).
- “Causing” liability may be found where a respondent’s conduct contributes to a firm’s violation, including failures to maintain required records or to produce accurate records to regulators.
- Broker-dealers and advisers must maintain required records and produce accurate records promptly upon regulatory request; altering compliance records during an investigation can implicate both retention and production duties.
- Sanctions in SEC administrative proceedings are discretionary and depend on public-interest considerations, including egregiousness, scienter, recurrence, harm, deterrence, and other remedial factors.

## Conclusion

The ALJ held that a compliance officer’s post hoc alteration of a compliance review record and related misstatements supported findings that she aided and abetted and caused her firm’s recordkeeping and record-production violations, but declined to order any sanction after weighing the public-interest factors.


In re Judy K. Wolf, Admin. Proc. File No. 3-16195 (S.E.C. Aug. 5, 2015)