Articles Tagged with Wells Fargo

shutterstock_173849111-227x300The Financial Industry Regulatory Authority (FINRA) has ordered Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC to pay more than $3.4 million in restitution to customers for alleged unsuitable recommendations of volatility-linked exchange-traded products (ETPs) and supervisory failures, according to InvestmentNews.

FINRA found that between July 1, 2010, and May 1. 2012, “certain Wells Fargo reps recommended volatility-linked ETFs and ETNs without fully understanding their risks and features.”

According to FINRA, “certain Wells Fargo representatives mistakenly believed that the products could be used as a long-term hedge on their customers’ equity positions in the event of a market downturn. In fact, volatility-linked ETPs are generally short-term trading products that degrade significantly over time and should not be used as part of a long-term buy-and-hold investment strategy.”

shutterstock_19498822-200x300The law offices of Gana LLP continue to report on investor related losses and potential legal remedies due to recommendations to investor in oil and gas and commodities related investments.  According to BrokerCheck records, customers have filed about ten complaints with the Financial Industry Regulatory Authority’s (FINRA) against broker Regan Rohl (Rohl), a registered representative with Wells Fargo Advisors Financial Network, LLC (Wells Fargo) out of the firm’s Fargo, North Dakota office location.

Many of the customer complaints against Rohl allege a number of securities law violations including that the broker made unsuitable investments and overcenoncetrated clients in oil & gas related investments among other claims.  The most recent complaint was filed in August 2017 and alleged Rohl recommended an unsuitable portfolio over concentrated in energy sector investments and to hold these investments after they began to decline in value causing $75,000.  The claim is currently pending.

In July 2017 another customer filed a complaint alleging $150,000 in damages.  The claim is currently pending.  In June 2017 a customer alleged that from April 2011 through December 2016, Rohl made unsuitable investment recommendations to buy and concentrate their portfolio of four accounts into oil and gas sector master limited partnerships and closed end funds causing $1,500,000 in damages.  The claim is currently pending.

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shutterstock_1832893-226x300The law offices of Gana LLP continue to report on investor related losses and potential legal remedies due to recommendations to investor in oil and gas and commodities related investments.  According to BrokerCheck records, Customers have filed about seven complaints with the Financial Industry Regulatory Authority’s (FINRA) against broker Jeffrey Grayson (Grayson), a former registered representative with Wells Fargo Advisors (Wells Fargo) out of the firm’s Florham Park, New Jersey office location.

Some of the customer complaints against Grayson allege a number of securities law violations including that the broker made unsuitable investments and overcenoncetrated clients in oil & gas related investments among other claims.  The most recent complaint was filed in June 2017 and alleged unauthorized trading and unsuitable investments.  The complaint is currently pending.

In February 2017 FINRA suspended Grayson alleging that Grayson exercised discretion in four accounts without written authorization from those customers and without having obtained approval from his member firm to treat those customer accounts as discretionary. FINRA also found that Grayson provided inaccurate responses about his use of discretion on the firm’s annual compliance documents.

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shutterstock_62862913-259x300The investment fraud lawyers of Gana LLP are examining multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against financial advisor Gregory Pease (Pease). According to BrokerCheck, Pease has a multitude of disclosures concerning: churning, excessive trading, unauthorized trading, unsuitability, and breach of fiduciary duty.

The most recent customer complaint filed against Pease was filed in November 2016. The complaint alleged that during the period between 1998 and 2015, Pease made unsuitable recommendations, misrepresentation, and omission of material facts regarding mutual funds. The alleged damages are unspecified and the case is still pending.

Another customer complaint against Pease was filed in March 2015 and alleged that Pease misrepresented the client’s financial objectives. According the customer, the amount of trades and fees that occurred in the accounts did not properly align with the client’s desires. The alleged damages were worth $13,266.81 and the case was later settled for $10,297.88.

shutterstock_178801082-300x200Ameriprise Financial Services, Inc. (Ameriprise) financial advisor Jonathan Mirer (Mirer) has subject to seven customer complaints according to BrokerCheck records.  Mirer has been employed with Ameriprise since July 2016.  According to BrokerCheck the most recent customer complaints allege unsuitable investments and unauthorized trading among other claims.

The most recent complaint was filed in October 2016 and alleges unauthorized trading causing $62,000 in damages.  The complaint was settled.  In April 2016 another investor filed a complaint alleging damages as a result of unsuitable investments in energy stocks.  The complaint was settled.  The securities lawyers of Gana LLP continue to investigate the customer complaints against Mirer.

Our firm is currently tracking a number of brokers that severely concentrated their clients in the oil and gas and commodities sectors which has historically possessed speculative risks due to the volatile nature of commodities prices.  Before making such recommendations, financial advisors must ensure that the oil and gas and commodities related investments being recommended to their client is appropriate for the investor and conduct due diligence on the company before making the recommendation.  Unfortunately, sometimes adivsors fail to conduct sufficient research or understand the risks and prospects of the company and the volatile nature of commodities.

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shutterstock_94127350-300x205In March 2017, Broker Richard Lucker (Lucker) was subject to a massive complaint alleging $14,447,501 in damages.  Lucker is currently employed by Wells Fargo Clearing Services, LLC (Wells Fargo).  According BrokerCheck the customer complained that there was a failure to supervise with respect to Lucker’s management of her account from 2011 to 2013.  There are no other details provided as to which products or the type of trading activity that occurred that caused the losses complained of.  The complaint is currently pending.  The securities lawyers of Gana LLP continue to investigate the customer complaint against Lucker.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client.  In order to make a suitable recommendation the broker must meet certain requirements.  First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors.  Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

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shutterstock_175835072-300x199The investment lawyers of Gana LLP are investigating the LPL Financial LLC’s (LPL) termination of former broker Christopher Russell (Russell) working out of the Huntsville, Alabama office.  LPL terminated Russell in November 2016.  According to the firm’s Financial Industry Regulatory Authority (FINRA) BrokerCheck filing the firm stated that Russell was in “Violation of Firm policy regarding private securities transactions.”  No other disclosure concerning the extent and nature of the activity is disclosed.  However, Russell has disclosed several outside business activities including his d/b/a Cadence Investment Services.  Russell has also disclosed Cadence Bank described as a private bank.  Russell has also disclosed involvement with the Huntsville Chamber of Commerce and the Community Foundation of Huntsville.

The providing of loans, selling of promissory notes, or recommending investments outside of the firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.  Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, real estate agents, or insurance agents to clients of those side practices.

Russell entered the securities industry in 2005.  From May 2008 until March 2013, Russell was associated with Wells Fargo Advisors, LLC.  Then, from May 2014 until November 2016 Russell was associated with LPL out of the firm’s Huntsville, Alabama office location.

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shutterstock_187532303-300x200Our firm is investigating claims made by various regulators and brokerage firms including the State of Washington against broker Douglas Donnelly (Donnelly), formerly associated with brokerage firms Wells Fargo Advisors, LLC (Wells Fargo), Northwest Asset Management (Northwest), and Dinosaur Financial Group, L.L.C. (Dinosaur Financial).  The allegations revolve around the offering of investments outside of the brokerage firm –a practice known in the industry as “selling away”.  Often times brokers who engage in this practice use outside businesses in order to market their securities.  According to The Financial Industry Regulatory Authority’s (FINRA) brokercheck records Donnelly has been subject to two customer complaints, two regulatory events, and two terminations for cause.  Donnelly has also disclosed outside business activities including Passing Time Winery and Concert Wealth Management.

One of the regulatory events involves claims by the State of Washington alleging that in June 2010, Donnelly began to invest $200,000 in a private placement. Thereafter, Washington alleged that Donnelly sent information about the private placement to potential investors from his Wells Fargo email account.  It was also alleged that Donnelly held meetings at his Wells Fargo office to introduce his Wells Fargo clients to the company’s personnel and provided disclosure information about the company to potential investors.  Washington found that Donnelly introduced approximately 40 individuals to the private placement who invested approximately $4,000,000. Washington found that Wells Fargo investigated and terminated Donnelly for introducing firm clients to the private placement without written approval.

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shutterstock_168478292Our firm has previously reported on the growing trend of brokerage firms recommending non-purpose loans secured by their brokerage accounts to clients.  See Investors Risk Big Losses with Loans Secured by Securities Collateral Accounts.  Recently, the state of Massachusetts charged Morgan Stanley with conducting unethical – high-pressure – sales contests among its financial advisers to encourage clients to take out loans.  According to newsources, from January 2014 until April 2015, the firm ran two different contests involving 30 advisers in Massachusetts and Rhode Island with the express goal of persuading customers to take out securities-based loans (SBLOCs) with their securities accounts serving as collateral.  Advisers were promised bonuses of $1,000 for 10 loans, $3,000 for 20 loans and $5,000 for 30 loans. The contest was alleged to have generated $24 million in new loans and was run despite an internal Morgan Stanley prohibition on such initiatives.

As a background, these lines of credit allow investors to borrow money using securities held in the investment accounts as collateral and allow the investor to continue to trade securities in the pledged accounts. An SBLOC typically requires monthly interest-only payments until repaid. Thus, when an investor losses a significant amount of their portfolio the investor has made very little progress in repaying the loan and may have few to no options to pay the loan back.  Recently FINRA issued an “Investor Alert” entitled “Securities-Backed Lines of Credit – It May Pay to See Beyond the Pitch” recognizing the conflicts between brokerage firms incentivized by “SBLOCs [that] can be a key revenue source for securities firms” and those same firms “placing your financial future at greater risk.”

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shutterstock_160486019The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Thomas Braley (Braley).  According to BrokerCheck records Braley has been subject to at least four customer complaints.  The customer complaints against Braley alleges securities law violations that including unauthorized trading , unsuitable investments, and misrepresentations among other claims.

In May 2016 a customer filed a complaint against Braley alleging that unsuitable investment recommendations were made, excessive trading, and misrepresentation from January 2013 to February 2016 that caused $180,000 in damages.  The complaint is currently pending.

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