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Wells Fargo Fined $2.1 Million For Exchange Traded Fund (ETFs) Sales

On May 1, 2012, FINRA fined Wells Fargo $2.1 million, censured the firm and ordered restitution of $641,489 to customers for selling leveraged and inverse exchange-traded funds (non-traditional ETFs) "without reasonable supervision".

The letter of acceptance waiver and consent between FINRA and Wells Fargo contains the following findings:

  • Wells Fargo consented to a fine of $350,000 in August 2009 for supervisory issues related to the sale of annuities
  • In May 2009, they were fined $1.4 million for supervisory issues related to delivery of offering documents
  • In February 2009, they were fined $4.41 million supervisory issues related to the abuse of breakpoints in connection with the sale of mutual funds.
  • From January 2008 to June 2009 the company failed to maintain a supervisory system in connection with the sale of non-traditional ETF's
  • Certain Wells Fargo brokers did not have an adequate understanding of non-traditional ETFs before recommending these products to customers
  • During the time frame examined by FINRA Wells Fargo customers bought and sold over $9.9 billion of non-traditional ETFs
  • Certain customers with conservative investment objectives and/or risk tolerance profiles held non-traditional ETFs for several months including a 65 year old conservative customer with a $50,000 net worth who lost $25,000 on ETF

If you are a conservative investor who has suffered losses on ETFs purchased from Wells Fargo, you may be able to recover those losses. Please contact our office to discuss your legal rights. Nationwide representation. Free consultation. 561 391 1900.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.