Did you suffer investment losses with Wells Fargo Clearing Services (f/k/a Wells Fargo Advisors) (CRD# 19616) (SEC# 801-37967, 8-37180)?
Galvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing with Wells Fargo Clearing Services (f/k/a Wells Fargo Advisors). If you suffered losses investing with Wells Fargo Clearing Services (f/k/a Wells Fargo Advisors), then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim.
Did you suffer investment losses with Wells Fargo Clearing Services (f/k/a Wells Fargo Advisors) (CRD# 19616) (SEC# 801-37967, 8-37180)?
Galvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing with Wells Fargo Clearing Services (f/k/a Wells Fargo Advisors). If you suffered losses investing with Wells Fargo Clearing Services (f/k/a Wells Fargo Advisors), then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim.
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
As of September 9, 2020, Wells Fargo Clearing Services (f/k/a Wells Fargo Advisors)’s FINRA BrokerCheck Report contains the following:
164 Regulatory Event Disclosures
2 Civil Event Disclosures
295 Arbitration Disclosures
UPDATE 9/2/2020: FINRA announced today that Wells Fargo Clearing Services has agreed to pay more than $1.4 million in restitution, plus interest, to approximately 100 customers and fines totaling $675,000 for failing to supervise recommendations that customers switch from variable annuities to investment company products. FINRA found that from January 2011 through August 2016 Wells Fargo Clearing Services failed to supervise the suitability of recommendations that customers sell a variable annuity and use the proceeds to purchase one or more investment company products, such as mutual funds or unit investment trusts. In spite of directives in the firms’ supervisory procedures that supervisors review the suitability of any product switch by considering the comparative costs and benefits associated with the new and existing products, the firms did not obtain from variable annuity issuers data sufficient to review the suitability of variable annuity surrenders and subsequent switches, including surrender fees. Wells Fargo Clearing Services’s procedures also required the firms to send switch letters to clients, which would have confirmed customers’ understanding of the transaction, as well as related risks and expenses. Although the procedures required that such letters be sent “automatically … based on alerts generated by [the firms’] supervisory system[s], unless withheld by the qualified supervisor,” the firms did not, in fact, have a switch alert to identify switches from variable annuities to investment company products during the relevant period and the firms did not send switch letters to affected customers. As a result, between January 2011 and August 2016, Wells Fargo Clearing Services’s representatives recommended at least 101 potentially unsuitable switches that required customers to incur both surrender fees and substantial new sales charges. For example, one former representative recommended that a customer liquidate a variable annuity with a surrender value of $126,681—which caused the customer to pay a surrender fee of $5,070—and then use the proceeds to purchase class A mutual funds with upfront sales charges totaling $5,531. In addition to causing the customer to incur $10,601 in surrender fees and upfront sales charges, the recommended switch resulted in the customer earning less annual income than she would have earned had she not sold the variable annuity. Jessica Hopper, Executive Vice President and Head of FINRA’s Department of Enforcement, said, “Firms must have a reasonable supervisory system in place to detect potentially unsuitable switches. Wells Fargo failed to meet this standard. We are pleased that customers will receive restitution for surrender fees and sales charges incurred as a result of these recommendations.” In settling this matter, Wells Fargo Clearing Services neither admitted nor denied the charges, but consented to the entry of FINRA’s findings. In addition, in August 2016, the firm took several steps to improve its supervision of switches involving variable annuities, including developing a switch alert to identify when the proceeds from a variable annuity liquidation are used to purchase an investment company product.
UPDATE 4/11/2020: According to FINRA’s March 2020 Disciplinary Actions: “Wells Fargo Advisors, LLC nka Wells Fargo Clearing Services, LLC (CRD #19616, St. Louis, Missouri) January 29, 2020 – An AWC was issued in which the firm was censured and fined $175,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to reasonably supervise a former registered representative who excessively traded equity positions in accounts belonging to an elderly customer. The findings stated that the customer was 88 years old when the trading commenced and that as a result of the excessive trading, she paid at least $300,000 in commissions and other fees. The firm’s computer program flagged the customer’s accounts for high velocity; however, the firm did not reasonably address these flags. Following its investigation, the firm discharged the representative responsible for the customer’s accounts. Ultimately, the firm paid $1 million in restitution to the customer in settlement of a complaint that she filed regarding the activity in her accounts. (FINRA Case #2017053034301)”
UPDATE 7/6/2020: The Secretary of the Commonwealth of Massachusetts, William Galvin, announced that his office opened an investigations into Wells Fargo Advisors on March 8, 2018. The investigations seeks information related to inappropriate referrals of brokerage customers to managed and advisory accounts, unsuitable recommendations of alternative investments, as well as unsuitable referrals and recommendations in connection with 401(k) rollovers. Wells Fargo disclosed in a recent regulatory filing that it is “assessing whether there have been inappropriate referrals or recommendations, including with respect to rollovers for 401(k) plan participants, certain alternative investments, or referrals of brokerage customers to the Company’s investment and fiduciary services business.” As part of the investigation, Galvin’s office will be seeking additional information to determine the scope of Wells Fargo’s internal investigation, as well as reasonable assurances that any Massachusetts investors affected by unsuitable recommendations will be made whole. “I am aware that there has been a recent trend in the industry to push investors into wealth management accounts which may bring more revenues to the firm, but which are not suitable for all investors,” Galvin said. “Given the recent retirement savings crisis in America, referrals and recommendations involving 401(k) accounts should be closely scrutinized, in light of the Department of Labor’s Fiduciary Rule.” “Wells Fargo’s recent banking scandal, which involved opening bogus accounts for their customers, leads me to believe that where there is smoke, there’s fire,” Galvin continued. “I need to be assured that Massachusetts residents haven’t been burned by corporate greed.” See Secretary Galvin Opens Investigation Into Wells Fargo Advisors.
UPDATE 4/6/20: According to reports, the Securities and Exchange Commission has recently announced that Wells Fargo Advisors has agreed to pay $35 million over shortcomings with its investment recommendation practices.
UPDATE 9/30/16: On September 12, 2016, a FINRA Panel awarded a customer of the firm, Jeffrey Ball, $74,873 in compensatory damages and $187,181 in punitive damages. “The Panel found that [Wells Fargo] breached its fiduciary duty to [Mr. Ball], its customer, and [Wells Fargo’s] conduct demonstrated a conscious disregard for [Mr. Ball’s] interests. The evidence indicates that [Wells Fargo’s] procedures to initiate and process a request to liquidate and transfer a non-Automated Customer Account Transfer Service account (which also had a collateral lien), and the managerial oversight necessary to ensure prompt compliance with a customer’s instructions are seriously flawed and should be improved.”
Main Office Location
ONE NORTH JEFFERSON AVENUE
MAIL CODE: H0004-050
ST. LOUIS, MO 63103
UNITED STATES
Mailing Address
ONE NORTH JEFFERSON AVENUE
MAIL CODE: H0004-050
ST. LOUIS, MO 63103
UNITED STATES
Business Telephone Number
314-875-3000
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
Wells Fargo Clearing Services (f/k/a Wells Fargo Advisors)’s Direct Owners and Executive Officers
WACHOVIA SECURITIES FINANCIAL HOLDINGS, LLC, SOLE MEMBER
ALEXANDER, JOHN WADE (CRD#:2327561), HEAD OF INTEGRATED BROKERAGE
CAPERTON, JULIE CIRCIO (CRD#:5166947), HEAD OF WEALTH CLIENT SOLUTIONS
CHASE, TERRY LEE (CRD#:823017), DESIGNATED STATE PRINCIPAL
FRANKLIN, JAMES M (CRD#:5011220), PRINCIPAL FINANCIAL OFFICER/ BOARD OF MANAGERS
HAYS, JAMES EDWARD (CRD#:1569212), PRESIDENT – CHIEF EXECUTIVE OFFICER / BOARD OF MANAGERS
HUBBERT, MARK WILLIAM (CRD#:1802805), BUSINESS CONTROL LEADER
HUNTRUDDY, HEATHER (CRD#:2091956), HEAD OF CLIENT EXPERIENCE AND GROWTH/ BOARD OF MANAGERS
HURLEY, KEVIN BRADY (CRD#:1293748), CHIEF COMPLIANCE OFFICER (IA ONLY)
KARANIK, ERIK ANTHONY (CRD#:2260890), HEAD OF PRODUCTS AND BRANCH INFRASTRUCTURE/CHIEF OPERATING OFFICER/ BOARD OF MANAGERS
METZ, KELLY (CRD#:2251657), PRINCIPAL OPERATIONS OFFICER/CHIEF OPERATIONS OFFICER/BACK OFFICE OPERATIONS
NADREAU, JOSEPH PETER (CRD#:2382449), HEAD OF WFA INNOVATION & STRATEGY/INDEPENDENT BROKERAGE AND PLATFORM SERVICES/BOARD OF MANAGERS
WILLIAMS, DAVID M (CRD#:2027711), CHIEF COMPLIANCE OFFICER/CONTROL PRINCIPAL
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
Due Diligence Requirement
FINRA requires broker-dealers to conduct due diligence on investments and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. FINRA Rule 2111(a) states that “a member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.”
Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability. Broker-Dealers that fail to conduct adequate due diligence on investments they recommend or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
Request a Free Consultation with a Securities Attorney
If you suffered losses investing with Wells Fargo Clearing Services (f/k/a Wells Fargo Advisors) and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
This information is all publicly available and is being provided to you by Galvin Legal, PLLC.
Galvin Legal, PLLC is a national securities arbitration, securities mediation, securities litigation, securities fraud, securities regulation and compliance, and investor protection law practice. For more information on Galvin Legal, PLLC and its representation of investors, please visit www.galvinlegal.com or call 1-800-405-5117.
Formerly Known As, Aliases, and Affiliates
EVEREN SECURITIES, INC.,FIRST CLEARING,FIRST UNION SECURITIES, INC.,KEMPER CAPITAL MARKETS, INC.,KEMPER SECURITIES GROUP, INC.,WACHOVIA SECURITIES, INC.,WACHOVIA SECURITIES, LLC,WELLS FARGO ADVISORS,WELLS FARGO ADVISORS, LLC,WELLS FARGO CLEARING SERVICES, LLC
