Did You Lose Money Investing with Wells Fargo Financial Advisor Allen Wilson?
Posted on Thursday, May 23rd, 2019 at 12:25 pm
Erez Law is currently investigating Wells Fargo financial advisor Allen Wilson (CRD# 2420229) regarding structured product losses. Wilson has been registered with Wells Fargo Clearing Services, LLC in Florham Park, New Jersey since 2012.
According to public records, a former client of Wilson alleges her financial advisor mismanaged her retirement savings and recommended an investment portfolio that was concentrated in structured products. The retired widow was seeking to preserve her capital and generate a modest degree of income to cover her daily expenses. It is alleged that Wilson recommended the window invest in complex structured products that were not suitable for an unsophisticated investor who was looking to preserve capital.
Structured products are complex securities derived from or based on a single security or index, basket of securities or indices, a debt issuance, a commodity and/or a foreign currency. Most structured products pay an interest or coupon rate based on certain defined parameters. Structured Products typically consist of a note and a derivative, most often an option. While the note pays interest, the derivative defines the payment at maturity. Despite the fact that structured products most often involve options, they are typically marketed as debt securities.
Structured products can offer a form of principal protection and frequently cap the upside participation in the underlying investment. Additionally, structured products do not trade on an exchange and are generally not liquid investments. Structured products are issued by brokerage firms and are registered with the SEC. Structured CDs are issued by banks and are not registered with the SEC. Given the complexity of these structured products and their similarities to options, securities regulators have required brokerage firms to specially approve clients for structured products.
Structured products generally had long maturities such as 20 years. Given that the securities are not listed on an exchange and therefore highly illiquid, investors would have to sell the structured products at significant discounts if they sold prior to maturity.
However, as a retired investor, it is not feasible for the investor to hold these products until maturity of 10 to 20 years or more. The investor also alleged that Wilson fraudulently altered records and statements by listing her as an aggressive investor on forms, without her knowledge or consent.
Wilson has been the subject of four customer complaints between 2000 and 2018, according to his CRD report:
October 2018. “Claimant alleges that from 2012 through 2016, the FA recommended and over-concentrated her portfolio in unsuitable products.” The case is currently pending
August 2018. “Client claims that variable rate notes recommended by FA were not appropriate for her portfolio. (8/22/2012-7/18/2018).” The customer is seeking $35,000 in damages and the case is currently pending.
June 2018. “Claimants allege that from 2012 to 2018, FA made unsuitable investments and exercised discretion in their account without approval.” The case is currently pending.
April 2000. “Subsequent to a default, customer alleged verbally that iridium bonds purchased in 11/98 and 3/99 were unsuitable.” The customer sought $60,000 in damages and the case was settled for $25,000.
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 Wilson’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If 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.