Charles Frieda, a former registered representative with Wells Fargo Clearing Services, LLC (f/k/a Wells Fargo Advisors, LLC), submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was barred by the Financial Industry Regulatory Authority (FINRA) for recommending an investment strategy which was over-concentrated in energy-sector securities and unsuitable for his clients. FINRA found that Mr. Frieda’s unsuitable recommendations resulted in millions of dollars in losses to his clients.
FINRA found that Charles Henry Frieda (along with another Wells Fargo representative) recommended an over-concentration of energy-sector securities, some of which were speculative, to more than 50 customers. Because of the speculative nature of the energy-sector securities, the volatility of the energy market, and the highly over-concentrated levels in the clients’ accounts, Mr. Frieda’s customers were exposed to significant losses. According to FINRA, Mr. Frieda failed to properly consider his customers’ investment profiles, including their investment experience, risk tolerance, investment time horizon, net worth, and liquidity needs. Even when the energy market began a downturn in 2015, Mr. Frieda continued to unsuitably recommend that his clients adhere to his investment strategy. Due to his highly unsuitable recommendations, Mr. Frieda’s customers suffered millions of dollars in aggregate losses. Without admitting FINRA’s findings, Charles H. Frieda, of Anaheim, California, was barred from association with any FINRA member in all capacities.
FINRA rules require brokerage firms to establish and implement a reasonable supervisory system to protect customers from the risks associated with investing. The implementation of the rules requires supervisors to monitor their 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 broker-dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for investment losses which stem from their employees’ misconduct. Therefore, investors who have suffered losses due to the unsuitable recommendations of registered representatives can bring forth claims to recover damages against brokerage firms, like Wells Fargo, which have a duty to supervise employees in order to protect their customers’ interests.
Have you suffered losses in your Wells Fargo account due to unsuitable investment recommendations? 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 stockbrokers who may have made unsuitable recommendations and caused investors 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 visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.