Wells Fargo Pays $550,000 for Failing to Supervise

Miller Stern Lawyers – 410-Law-Firm is currently investigating clients of Wells Fargo Advisors who are victims of, and suffered damages and losses, due to the failure to supervise.  It has been reported that Wells Fargo Advisors has agreed to pay more than $550,000 in fines and restitution for failing to follow up on warnings it received about two now-barred California brokers who piled their customers into speculative energy stocks, according to FINRA.  Miller Stern Lawyers recently won a $1.5 Million award against Stifel for similar actions of piling their customers into biotechnology and health care stocks.

According to FINRA, the firm failed to investigate trading across customer accounts managed by the brokers. Red flags were raised about overconcentration in the accounts of four customers in a single, low-priced energy stock (ranging from 35.2% to 87.0%), according to a consent letter signed on Thursday by Wells Fargo Advisors CEO Jim Hays.

Wells, which the advisors, has already paid 67 customers $9.7 million for their losses in the four stocks. (Finra barred them in December 2017.) But Wells agreed this week to compensate three other customers almost $201,500, and accept a censure and fine of $350,000, according to the agreement.

Wells’s written supervisory procedures required it not only to review other customers’ portfolios following the alerts about the four accounts, but to consider client contact and to check whether the brokers documented suitability of client portfolios, according to FINRA documents.

Wells Fargo Advisors violated Finra’s Rule 3110(a) requiring firms to build and maintain supervisory systems and its broad Rule 2010 requiring members to conduct business with high standards of commercial honor and to maintain just and equitable principles of trade.

Wells’s Hays signed the consent agreement without admitting or denying Finra’s findings, as is typical of acceptance, waiver and consent letters offered by the industry self-regulator.

Neither advisor could not be reached for comment, according to Advisor Hub

Miller Stern Lawyers, LLC, a Baltimore Securities Law firm, currently represents investors for claims of investment losses from unauthorized trading, over concentration, irregular options trading, margin and unsuitability claims, broker fraud, securities fraud, securities litigation and other broker and broker/dealers for investment losses and fraud.  If you or anyone you know have experienced investment losses from the actions above or other situations, please call 410-LAW-FIRM ( 410-529-3476 )or fill out the contact us form for a no cost consultation and evaluation of your claim


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