No Recovery, No Fee

424-835-5733 | 310-525-3516

You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

Whether broker churning or ignorance, same result for investors

Quick to act, slow to monitor and enforce.

That about sums up the response of officials at Wells Fargo supervising brokers who peddled so-called "volatile exchange-traded products" to investors over a several-year period.

Reportedly, many of those investment advisers thought that volatile ETPs were suitable hedging devices for mom-and-pop investors needing to diversify their portfolios.

Actually, they were a far cry from that.

As one recent media spotlight on inappropriately recommended ETPs points out, those products "are typically short-term trading investments with considerable risk that tend to lose value over time."

And that is exactly what they did for about 1,300 bank customers who were urged to buy them by Wells Fargo brokers.

The recommendations came in the wake of bank officials' failure to impose restrictions on advisers offering ETPs. The bank knew well about heightened risks to investors related to ETPs, but nonetheless neglected to rein in its brokers over a lengthy period during which they liberally recommended the products to customers.

That breached Finra's suitability standard on investments for common retail investors, and resulted in a recent settlement ordering Wells Fargo to pay $3.4 million back to customers as restitution.

Government regulators say that the complexity of the products turned out to be, well, overly complex for many advisers, with their unsuitable recommendations owing to ignorance and not to any bad-faith motives.

Many investors who lose money through inappropriate advice rendered by professionals they are justifiably relying upon likely don't care much -- if at all -- whether their losses owe to broker misconduct or negligence.

The bottom line is this: Their advisers' tips worked to drain their portfolios.

In the instant case, some of that money is fortunately coming back.

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