Item: Shepherd Smith Edwards & Kantas, LLP
Rating: 5
Author: M.B.

Wells Fargo Securities

Our investment fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm) represent investors who have suffered losses caused by the negligent or wrongful misconduct of Wells Fargo Securities (WFS) or its brokers. This subsidiary was founded in 2009 after Wells Fargo & Co . (WFC) acquired Wachovia for $15.1M. Wells Fargo Securities was formerly Wachovia Capital Markets, LLC.

Wells Fargo Securities is a registered brokerage firm with the US Securities and Exchange Commission (SEC). It is a municipal securities dealer and municipal securities broker under the Municipal Securities Rulemaking Board (MSRB). Although its main headquarters is in Charlotte, North Carolina, Wells Fargo Securities has registered representatives all over the US.

The broker-dealer primarily works with institutional investors, as well as government and corporate customers. It provides a number of services, including those involving investment banking, investment research, mergers and acquisitions, fixed income and equity sales and trading, and other matters. Wells Fargo Securities offers limited brokerage, financial adviser, and custody services related to the buying and selling of fixed-income and equities securities and equity derivatives to retail investors.

Wells Fargo Subsidiary Involved in 142 Regulatory Events

The Financial Industry Regulatory Authority (FINRA)'s website notes that Wells Fargo Securities has been the subject of 142 regulatory events. This type of event arises when FINRA, the US Securities and Exchange Commission (SEC), or a state securities regulator has investigated a brokerage firm for allegations that it violated industry rules or standards or federal or state laws. A few significant examples of such events involving this Wells Fargo subsidiary include:

2018: Wells Fargo Securities agreed to pay $800K over its involvement as underwriter in a municipal bond offering to finance a startup video game company. The SEC accused the broker-dealer of defrauding investors. The civil charges came after the Rhode Island Economic Development Corporation, now called the Rhode Island Commerce Corporation, put out $75M in bonds for the project. According to the Commission, investors were not fully apprised of the risks involved, and the startup video company eventually defaulted on its loan.

2017: FINRA ordered Wells Fargo Securities to pay a $3.25M fine for errors and inaccuracies related to its reporting of over-the-counter (OTC) options trades that occurred between 2008 and 2017. The self-regulatory organization (SRO) said that the brokerage firm's supervisory procedures were deficient.

2016: Wells Fargo Securities and Wells Fargo Prime Services, LLC were jointly fined $4M by FINRA for cybersecurity deficiencies that failed to properly protect customer and broker-dealer records from being altered. Three other Wells Fargo firms-Wells Fargo Advisors Financial Network, LLC Wells Fargo Advisors LLC (now called Wells Fargo Clearing Services), and First Clearing LLC (now named Wells Fargo Clearing Services) were jointly fined $1.5M for similar deficiencies.

2012: The SEC charged Wells Fargo Securities more than $6.5M for the unsuitable sales of asset-backed commercial papers (ABCPs), which were structured using high-risk mortgage-backed securities (MBS) and collateralized debt obligations (CDOs). These investments were sold to municipalities, nonprofits, and others. The regulator accused the broker-dealer of not disclosing all of the risks to these institutional clients and failing to make sure these investors were sophisticated enough to understand exactly the type of investment they were buying.

2011: Wells Fargo Securities consented to pay $6.75M of disgorgement and a $4.45M penalty to the SEC to resolve charges from when it was still Wachovia Capital Markets. The brokerage firm misconduct allegedly occurred as the housing market was starting to fail in 2006 and 2017 and involved the sale of two CDOs tied to the performance of residential mortgage-backed securities (RMBS). A Zulu Indian tribe and other investors were among those harmed.

SSEK Law Firm Represents Investors with Claims Against Wells Fargo Securities

Our brokerage firm misconduct lawyers represent high net worth individual investors, institutional investors, and retail investors throughout the US. We have recovered tens of millions of dollars on behalf of clients. If you suffered significant investment losses while working with Wells Fargo Securities, contact us online or call SSEK Law Firm at (800) 259-9010 to schedule your free consultation.

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