Wells Fargo Business Partners Barred After Making Unsuitable Recommendations in High-Risk Energy Sector
Charles Henry Frieda (CRD#: 5502319) was barred from acting as a broker or from otherwise associating with a broker-dealer firm after numerous complaints were filed against him and fellow Wells Fargo broker Charles Bernard Lynch Jr. (CRD#: 3004877).
According to BrokerCheck, Frieda began working for Wells Fargo Clearing Services, LLC in 2012 until his employment was terminated in 2017. Lynch, according to BrokerCheck, was employed with Wells Fargo from 2012 until 2016. During the course of their employment, Frieda and Lynch received nearly 60 customer disputes. The majority of those disputes dealt with unsuitability. Frieda and Lynch allegedly made recommendations for high-risk energy investments not in line with their customers’ investment goals and risk tolerance. According to the Letter of Acceptance, Waiver, and Consent, Mr. Frieda, along with Mr. Lynch, “recommended an investment strategy to more than 50 customers … causing the customers accounts to become significantly over-concentrated in a single sector.” This over-concentration in the volatile energy sector allegedly cost customers millions of dollars in losses.
FINRA suggests that not only were the recommendations unsuitable but that Frieda and Lynch “failed to properly consider and failed to obtain accurate customer investment profile information to determine the suitability of his over-concentration strategy and securities he recommended as part of this strategy.” On December 11, 2017, Frieda and Lynch were barred indefinitely from acting as brokers or otherwise associating with a broker-dealer firm.
For many investors, the investment strategy proved devastating. In 2015, the energy market started a downward trend costing their customers significant losses. In some cases, the over-concentration in the energy-sector securities recommended by Frieda and Lynch “exceeded 50% of the customer’s net worth.”
The disbarment and firing of Frieda and Lynch do not preclude investors from making future claims regarding losses suffered at the hands of these brokers. At Levin Law, our attorneys may be able to help you recover your damages through a FINRA arbitration. Contact our offices today at (305) 402-9050 for a free consultation.