Our investor fraud lawyers at SSEK Law Firm are looking into claims involving former Wells Fargo (WFC) broker Leonard Kinsman (Kinsman). Kinsman currently still faces at least two customer complaints that were brought before the Financial Industry Regulatory Authority (FINRA), one claim involves a New Jersey widow and mother of three who is accusing him of defrauding her family of their life savings.
Until July 2019, Kinsman belonged to the Wells Fargo Financial Network of brokers that operate independently, even as they use the bank’s compliance software and investment systems. No details have been provided into how or why he is no longer affiliated with the firm’s broker network.
According to the New York Post, the widow began working with Kinsman in 2012 when he was still a Merrill Lynch broker and after her husband had passed away. She requested that Kinsman place her money, a $2.27M life insurance settlement, in conservative, diversified investments that promoted long-term growth so she could support her family off the interest.
Instead, in 2014 after Kinsman became a Wells Fargo broker, he allegedly forged her initials and placed her money in “aggressive options trade” accounts while engaging in high risk trades that charged her high fees. Now, she is claiming hundreds of thousands of dollars in losses.
Kinsman’s BrokerCheck record indicates that he has 22 years of experience in the industry. He was previously a registered Citigroup (C) broker. Before that he was a broker with Royal Hutton Securities, a brokerage firm that has since been expelled by FINRA, as well as another now banned broker-dealer, Meyers Pollock Robbins, whose former president pleaded guilty to operating a pump-and-dump scam.
Kinsman’s industry record notes several other customer disputes. Three of them were settled for $180K, $200K, and $24K, respectively. Another complaint was withdrawn.
Even with his track record, Wells Fargo retained Kinsman as a broker. Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) is investigating allegations brought by investors who suffered losses that they now suspect may be due to fraud or negligence by Leonard Kinsman or any other Wells Fargo broker.
Other Ex-Wells Fargo Traders in Trouble
Last month, the US Securities and Exchange Commission (SEC) charged former Wells Fargo Clearing Services trader Thomas Muldoon for allegedly running a fraudulent retail order scam involving municipal bond offerings. Earlier this year, the SEC ordered another ex-Wells Fargo Financial Network advisor, John Gregory Schmidt, to pay more than $1.1M for defrauding older investors. Schmidt has since been barred by the Commission. After pleading no contest to more than 120 counts in the parallel criminal case against him, Schmidt was sentenced to five years in prison.
Brokerage Firm Negligence
Brokerage firms have a responsibility to properly supervise their registered representatives and make sure that clients are not subjected to negligent acts or wrongdoing. Even when the broker is an “independent” rep., broker-dealers still must supervise them to make sure they are serving the firm’s clients, in compliance with regulations, laws, firm rules, and procedures, and not engaging in any type of fraud. Contact SSEK Law Firm today.