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Wells Fargo Broker-Dealers Ordered to Pay $3.4 Million in Restitution

Meyer Wilson

Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC were recently ordered to pay more than $3.4 million in restitutions for unsuitable recommendations and related supervisory failures.

According to the Financial Industry Regulatory Authority (FINRA), Wells Fargo brokers recommended that their customers invest in volatility-linked exchange-traded products (ETPs) between July 1, 2010 and May 1, 2012 without fully understanding the features and risks that came with those offerings.

During their investigation, FINRA revealed that Wells Fargo did not have a system in place to reasonably supervise solicited sales of ETPs at the time of the offenses.

“FINRA seeks restitution when customers have been harmed by a member firm’s misconduct,” stated Susan Schroeder, Executive Vice President of FINRA’s Department of Enforcement. “We also credit firms that proactively detect and correct issues prior to detection by FINRA, as Wells Fargo did in this matter. Firms soliciting sales of volatility ETPs should already be well aware of the unique risks that they pose – but FINRA’s Regulatory Notice 17-32 is intended to further educate the industry so that member firms can assess their own practices and take appropriate remedial action if necessary.”

Wells Fargo consented to the entry of FINRA’s findings, but neither admitted nor denied the charges in the settlement.

At Meyer Wilson, our investment fraud lawyers have dedicated their careers to providing victims of fraud and investors whose finances were mismanaged with the experienced legal representation they require. Our firm has secured more than $350 million in verdicts and settlements since we first started working with victims of fraud nearly 20 years ago, and we remain committed to helping each new client who walks through our doors secure the legal outcome they deserve. Call us today at one of our offices to discuss your situation with one of our lawyers, or send us your information through our online form to start out with a free evaluation.