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Did You Suffer Investment Losses with Barred Broker Richard Wesselt?

Posted on Wednesday, June 5th, 2019 at 2:57 pm    

Richard Wesselt

Barred broker Richard Wesselt (CRD# 2195569) faces a $5 million-plus customer complaint for unsuitable whole life investment strategy. Wesselt was registered with Fortune Financial Services, Inc. in Collegeville, Pennsylvania from 2017 to November 2020. Previously, Wesselt was registered with the O.N. Equity Sales Company in Collegeville, Pennsylvania from 2014 to 2017. In 1997, Wesselt was terminated from W. S. Griffith & Co., Inc. in Hartford, Connecticut regarding, “Placing a customer’s signature on a document.” Also, Wesselt was registered with Sterne Agee Financial Services, Inc. in Jeffersonville, Pennsylvania from 2002 to 2014. 

In November 2020, FINRA barred Wesselt after he “consented to the sanction and to the entry of findings that he made unsuitable recommendations that customers purchase a variable annuity. The findings stated that these recommendations were inconsistent with the customers’ investment profiles, including their time horizon, liquidity needs, and risk tolerance. Wesselt’s recommended investment strategy generally involved three steps. First, Wesselt recommended that his customers liquidate their retirement savings, which they often held in qualified, tax-deferred accounts such as 401(k)s or IRAs. As a result, these customers lost benefits associated with their 401(k)s, including services such as access to investment advice, telephone help lines, educational materials and workshops. Next, Wesselt recommended that customers purchase a variable annuity with funds liquidated from their retirement plans. Finally, after the variable annuity was issued, Wesselt recommended customers take early withdrawals, causing customers to lose benefits associated with the variable annuity and incur surrender charges. These unsuitable recommendations caused the customers to incur surrender charges of $378,452. The customers were subjected to costly fees and penalties, forfeiture of expected benefits, lapsed or cancelled policies, and the depletion or complete loss of their retirement savings. Wesselt, by contrast, earned commissions of $686,025 from the sale of the variable annuities. The findings also stated that, at Wesselt’s direction, employees in his office engaged in a practice of obtaining customer signatures on blank or incomplete forms… The forms were then completed by Wesselt or his staff and submitted to the member firm or the variable annuity company for processing. As a result of this practice, many of Wesselt’s customers did not have the opportunity to read important disclosures regarding their variable annuities, and thus were unaware of the features, costs, and risks associated with these products.”

In November 2020, the state of Maryland barred Wesselt. 

According to public records, five former clients of Wesselt filed a FINRA arbitration claim against Sterne Agee Financial Services and Wesselt for alleged sales practice misconduct. The former customers are seeking between $5-10 million related to claims of churning and unsuitable investment recommendations. It is alleged that Wesselt recommend his clients purchase whole-life insurance products, which were issued by Ohio National Life Insurance, and fund those policies by taking loans against the cash value of existing policies and withdrawing money from annuities and 401(k) retirement savings plans. It is alleged that Wesselt pitched this strategy as one that the rich used,  which  would allow  investors to achieve financial security. Between the five claimants, they purchased 24 life insurance policies, as well as annuity products. The investors took out loans to purchase the policies, which became unsustainable and have lapsed, which has resulted in loss of premium and insurance. 

Wesselt has been the subject of 18 customer complaints between 2007 and 2020, four of which were denied and one was closed without action, according to his CRD report. Recent customer complaints include: 

September 2020. “Customers allege representative Wesselt misrepresented the sale of life insurance to build wealth for retirement and college funding.” The customer sought $5,000 in damages and the case was settled for $18,000. The complaint was regarding insurance and took place while Wesselt was registered with Sterne Agee and the O.N. Equity Sales Company. 

April 2020. “Unsuitable investment and strategy recommendations.” The customer is seeking $500,000 in damages. 

January 2020. “Clients alleged former ONESCO representative Wesselt recommended high commission products such as annuities and life insurance which were not suitable investments.” The customer sought $100,000 in damages and the case was settled for $75,000. The complaint took place while Wesselt was registered with the O.N. Equity Sales Company and SA Stone Wealth Management and was regarding variable annuities and insurance. 

November 2019. “Customer alleges several transactions related to the sale of life insurance were unsuitable.” The customer sought $100,000 in damages and the case was settled for $112,725. The complaint took place while Wesselt was registered with the O.N. Equity Sales Company and SA Stone Wealth Management and was regarding insurance. 

November 2019. “Customer alleges sale of whole life insurance policies was unsuitable.” The customer is seeking $20,000 in damages. The complaint took place while Wesselt was registered with Strene Agee and the O.N. Equity Sales Company.                             

June 2019. “Unsuitable investment recommendations, investment strategy and misrepresentations and omissions.” The customer is seeking $10,000,000 in damages. The complaint took place while Wesselt was registered with Sterne Agee Financial Services, Inc. and was regarding variable annuities, insurance, and mutual funds. 

April 2019. “Customer alleges Mr. Wesselt recommended the purchase of whole life insurance products funded by taking loans against cash values of existing policies and withdrawing money from annuities, IRA and 529 savings accounts.Client alleges strategy was unsuitable based on their goals and objectives.” The customer sought $200,000 in damages and the case was settled for $207,500.  The complaint took place while Wesselt was registered with the O.N. Equity Sales Company and SA Stone Wealth Management and was regarding insurance. 

April 2019. “Claimant alleges unsuitable investment recommendations, deceptive and unfair trade practices.” The customer sought $300,000 in damages and the case was settled for $85,000. The complaint took place while Wesselt was registered with Sterne Agee Financial Services and was regarding variable annuities and insurance. 

March 2019. “Unsuitable investment recommendations and investment strategy.” The customer is seeking $350,000 in this pending customer complaint. The complaint took place while Wesselt was registered with Sterne Agee Financial Services, Inc. and was regarding variable annuities, insurance, and mutual funds. 

February 2019. “Unsuitable investment recommendations, investment strategy and misrepresentations and omissions.” The customer sought $220,000 in damages and the case was settled for $100,000. The complaint took place while Wesselt was registered with the O.N. Equity Sales Company and SA Stone Wealth Management and was regarding insurance. 

December 2018. “Customer alleges Mr. Wesselt engaged in unsuitable sales practices relating to sale of insurance and annuities.” The customer sought $750,000 in damages and the case was settled for $275,000. The complaint took place while Wesselt was registered with the O.N. Equity Sales Company and was regarding variable annuities and insurance. 

June 2018. “Customer alleges unsuitable investment recommendations and misrepresentation.” The customer sought $400,000 in damages and the case was settled for $56,250. This case is regarding the sale of variable annuities and took place while Wesselt was registered with the O.N. Equity Sales Company. 

August 2017. “Customer alleges sale of variable annuity was not suitable. The time period is 8/14/2016 to 8/17/2017.” The customer sought $5,736 in damages and the case was settled for $25,674. This case is regarding the sale of variable annuities and took place while Wesselt was registered with the O.N. Equity Sales Company. 

March 2017. “Claimant alleges rep negligently sold unsuitable products in violation of his fiduciary duty.” The customer sought $100,000 in damages and the case was settled for $15,000. This case is regarding insurance products and took place while Wesselt was registered with Sterne Agee Financial Services, Inc.

August 2016. “Customers alleges sale of variable annuity and life insurance were unsuitable.” The customer sought $25,709.94 in damages and the case was settled for $24,257.14.

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, O.N. Equity Sales Company, W. S. Griffith & Co., Inc., SA Stone Wealth Management, and Sterne Agee Financial Services, Inc. may be liable for investment or other losses suffered by Wesselt’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.