Erez Law is currently investigating Wells Fargo financial advisor Daniel Fain (CRD# 500386) regarding overconcentrated and unsuitable investments. Fain has been registered with Wells Fargo in Boca Raton, Florida since 2003.
In one recent case of broker misconduct, two retired customers, each with a net worth of just under $250,000, allegedly turned to Fain for investment recommendations for their life savings. According to publicly available information, the customers were looking to generate income to sustain them throughout their retirement years. Fain recommended a stock portfolio that was concentrated in oil and gas investments, which was unsuitable for the needs of the clients. Even after complaining to Wells Fargo and being assigned a new financial adviser, the clients’ investment portfolios were never diversified to protect their retirement savings. In the end, the former Wells Fargo clients lost more than $280,000 due to the unsuitable and overconcentrated investments in oil and gas stocks.
More than 80% of the clients’ portfolio was allegedly concentrated in the following oil and gas stocks:
- Linn Energy
- Breitburn Energy
- BP Prudhoe
Breitburn Energy and Linn Energy have since filed for Chapter 11 of the U.S. Bankruptcy Code. These and other oil and gas companies have experienced price fluctuations over the past few years, which has put financial stress on the oil and gas industry. A supply glut in 2014 and 2015 led to some of the lowest prices the market has seen in recent years. In turn, securities values also dropped. While financial advisers can effectively coax clients into lucrative high risk, high yield investments in the oil and gas industry, some fail to fully inform their clients of the inherent risks.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Wells Fargo may be liable for investment or other losses suffered by Fain’s customers.
Erez Law represents investors in the United States for claims against Wells Fargo financial advisor Daniel Fain, who is alleged to make overconcentrated and unsuitable investment recommendations. If you were a client of Wells Fargo financial advisor Daniel Fain or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.