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Wells Fargo Broker Suspended for Unsuitable Discretionary Trades

Robert Batchen, a broker formerly employed with the Skokie, Illinois branch of Wells Fargo Advisors, LLC (Wells Fargo), submitted a letter of Acceptance, Waiver, and Consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he made unsuitable discretionary trades in his customer’s accounts, causing losses in excess of $56,000.

FINRA found that Robert James Batchen, of Wheeling, Illinois, exercised discretion in his customer’s accounts without the written authorization of the customer of his member firm, in violation of NASD Rule 2510(b).  Mr. Batchen is alleged by FINRA to have effected more than 900 discretionary trades during the relevant time period. 

According to FINRA, fifty-eight of those trades were unsuitable in light of the customer’s financial situation, conservative investment goals, and moderate risk tolerance.  Mr. Batchen allegedly effected unsuitable purchases of leveraged and inverse exchange-traded funds (ETFs) in his customer’s accounts without fully understanding the complex products.  Non-traditional ETFs, such as the ones purchased by Mr. Batchen, are designed to achieve their objectives within a single trading day.  Mr. Batchen is alleged by FINRA to have held them in his customer’s accounts for an average of 222 days, thereby causing his customer to experience financial losses of approximately $56,246.  Consequently, Robert Batchen was assessed a deferred fine of $15,000 and was suspended from association with any FINRA member in any capacity for five months.   The suspension is in effect from November 7, 2016 through April 6, 2017.

Stockbrokers, registered representatives, and other financial industry professionals have been known to engage in many types of misconduct which are in violation of industry rules and procedures.  In order to protect customers from such misconduct, FINRA rules require brokerage firms to establish and implement a supervisory system.  The implementation of these rules requires supervisors to monitor employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures.  If brokerage firms and/or their supervisors fail to establish and implement these protective supervisory rules, they may be held liable to account holders for losses which result from the employees’ misconduct.  As a result, account holders who have suffered losses due to unauthorized and/or unsuitable transactions or other types of stockbroker misconduct can bring forth claims to recover damages against brokerage firms, like Wells Fargo, which have a duty to supervise its employees in order to prevent stockbroker misconduct.

Have you suffered losses in your Wells Fargo account due to your stockbroker’s unauthorized trades, negligence or unsuitable recommendations?  Was Robert Batchen your stockbroker?  If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.  Mr. Pearce is accepting clients with valid claims against Wells Fargo for failing to supervise their employee and possibly causing investment losses.

The most important of investors’ rights is the right to be informed!  This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida.  For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities, and investment law issues.  The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally!  Please post a comment, call (800) 732-2889, send Mr. Pearce an email at pearce@rwpearce.com, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.