The Financial Industry Regulatory Authority has censured Wells Fargo Advisors and fined the firm $175,000 for failing to supervise a registered rep who excessively traded equity positions in the three accounts of an 88-year-old client.
Finra said that the Wells Fargo rep made more than 2,000 trades in the client’s three accounts from March 2012 to March 2016. The trades resulted in $300,000 in commissions and other fees paid to the broker.
Wells Fargo’s systems detected the trades, Finra said, but the firm did not look into the trading more fully.
After an investigation that took place in 2016, Wells Fargo fired the client’s broker and paid $1 million in restitution to settle a complaint the client filed about the handling of her accounts.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
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"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
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Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
