A Financial Industry Regulatory Authority securities arbitration panel ruled that Wells Fargo Advisors (WFC) must pay investor Anthony J. Pryor $357K related to purportedly unsuitable housing and energy investments. In his securities fraud claim, Pryor alleged negligent misrepresentation, negligent supervision, breach of fiduciary, and other causes. Wells Fargo denies Pryor’s allegations.
His advisor, Jeff Wilson, who was not named as a party in the securities arbitration case, has three customer disputes on his BrokerCheck record. One of the other claims that were settled for $250K also allegedly involving unsuitable investments.
Not every investment is suitable for every investor. Some investments may too be risky for certain investors or are not in alignment with their investment goals or financial needs. For example, many older retail investors that are about to retire will likely require a more conservative investment plan that a much younger, single investor.
If your investment adviser or broker recommended investments that were unsuitable for you and you sustained significant losses as a result, you may have grounds for a securities fraud claim. For example, a broker is obligated to only recommend investments and suggest trading strategies that are suitable for each client. It’s the broker’s job to understand how much risk a customer can handle, whether the client is a sophisticated investor or not, apprise of any risks, and become familiar with the investor’s goals.
A broker needs to have reasonable grounds for recommending an investment to a particular investor. Also, a firm can be held liable for not properly training or supervising a financial representative that provided the unsuitable investment advice.
At Shepherd Smith Edwards and Kantas LTD LLP, we are here to help investors recoup their losses from unsuitable investments. We have successfully brought securities arbitration claims against investment advisers, brokers, and brokerage firms.