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Massachusetts Securities Regulators Investigate Wells Fargo Over Alleged Unsuitable Recommendations

William GalvinA news release published by the Massachusetts Secretary of the Commonwealth’s office on March 8, 2019 reports that William Galvin, the Secretary of the Commonwealth, opened an investigation into allegations that Wells Fargo Advisors made “inappropriate referrals of brokerage customers to managed and advisory accounts” as well as unsuitable investment recommendations and unsuitable referrals. Fitapelli Kurta is interested in hearing from Massachusetts investors who have complaints regarding unsuitable investments recommended by Wells Fargo Advisors.

The announcement followed a filing by Wells Fargo Advisors in which it stated it was: ““assessing whether there have been inappropriate referrals or recommendations, including with respect to rollovers for 401(k) plan participants, certain alternative investments, or referrals of brokerage customers to the Company’s investment and fiduciary services business.”

The report by the Secretary of the Commonwealth’s office states that it is looking for “additional information” with which it will determine the scope of the firm’s internal investigation, and that it is looking for “reasonable assurances” that Massachusetts-based investors who were impacted by Wells Fargo’s allegedly unsuitable recommendations “will be made whole.”

Massachusetts Secretary of the Commonwealth William Galvin said in a statement: “I am aware that there has been a recent trend in the industry to push investors into wealth management accounts which may bring more revenues to the firm, but which are not suitable for all investors. Given the recent retirement savings crisis in America, referrals and recommendations involving 401(k) accounts should be closely scrutinized, in light of the Department of Labor’s Fiduciary Rule. Wells Fargo’s recent banking scandal, which involved opening bogus accounts for their customers, leads me to believe that where there is smoke, there’s fire. I need to be assured that Massachusetts residents haven’t been burned by corporate greed.”

For reference, both FINRA rules and federal securities law require firms like Wells Fargo Advisors to abide by a fiduciary duty to act only in their clients’ best interests. Among other things, this means they may recommend only investments that are considered suitable to their customers’ investment goals, investment experience, net worth, age, risk tolerance and other factors. Registered representatives and firms who breach relevant rules and regulations may be subject to disciplinary action from FINRA, the Securities and Exchange Commission, or state authorities.

If you or someone you know has a complaint regarding Wells Fargo Advisors, call Fitapelli Kurta at 877-238-4175 for a free consultation. You may be able to recover lost funds. Fitapelli Kurta accepts all cases on contingency: we only get paid if and when you collect money. You may have a limited window to file your complaint, so we encourage you to avoid delay. Call 877-238-4175 now to speak to an attorney for free.

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