WFG Investments, Inc. Financial Advisor Matthew Bell Has 46 Customer Disputes on Record
Posted on Tuesday, August 1st, 2017 at 7:42 pm
Erez Law is currently investigating former WFG Investments, Inc. financial advisor Matthew Bell (CRD# 3091864) regarding unsuitable recommendations and misrepresentations related to a pump-and-dump scheme involved a medical education company and two other microcap stocks. Bell was registered with Securities America, Inc. in San Antonio, Texas from August to October 2013, when he was allowed to voluntarily resign regarding, “The representative violated firm policies and procedures relating to private securities transactions.” Previously, he was registered with WFG Investments, Inc. in San Antonio, Texas from 2009 to 2013, when he was permitted to resign regarding, “Representative participated in settlement discussions with a client without the involvement of the firm’s compliance department.” Bell is currently not registered with any brokerage firm.
There is also a currently pending civil case brought about Bell by the United States Securities and Exchange commission (SEC). The SEC alleges that Bell pocketed millions of dollars running an elaborate pump-and-dump scheme involving shares of a medical education company in Pennsylvania and two other microcap stocks. This scheme involved a stock market manipulation ring that included two self-described bankers, a pair of dishonest brokers, and a corrupt company executive who issued misleading press releases. According to the SEC complaint, the CEO and president of the merchant banking firm teamed up with Bell, another broker, and the CEO of a medical education company to inflate the price of the company’s stock and see a profit at the expense of Bell’s customers.
The complaint alleges that the team “acquired 3 million restricted shares of the company stock following its reverse merger into a public shell company in May 2013, and improperly flooded the market with the shares as though they were unrestricted. They then engaged in a promotional campaign to hype the stock with the company CEO issuing materially misleading company press releases that were sometimes edited by the firm CEO. Meanwhile Bell and the other broker invested their brokerage clients in the company, often using their retirement funds to purchase the purportedly unrestricted shares. Once the firm CEO and its president reduced their trading and Bell and the other broker dumped their own shares on the market, the company’s stock price crashed to earth from a peak of nearly $7 per share.” In July 2014, the stock was trading below 10 cents per share. Bell and the other broker each made in excess of $500,000, and the CEO and president of the firm earned millions of dollars in gains from the company scheme.
The SEC complaint also alleges that the team corresponded via text message about the trading and creating a false impression of market activity, as well as discussed the potential of another penny stock to be more profitable than the medical education company. The penny stock in question began trading in April 2014 at $5.25 and move up incrementally in volume, which suggests manipulative trading. The SEC suspended trading of this company before the individuals could dump their shares on the market.
Bell has been the subject of 46 customer complaints between 2001 and 2017, two of which were closed without action and four were denied, according to his CRD report. Most of the customer complaints are regarding unsuitable recommendations and misrepresentations. There are currently three pending customer complaints on record:
May 2017. “Claimants allege unsuitable recommendations.” The customer is seeking $141,000 in damages and the case is currently pending.
January 2017. “Claimants allege the following allegations against WFG Investments, Inc. and Jefferies, LLC: misrepresentation contained within offering documents, failure to conduct reasonable due diligence and failure to execute due care.” The customer is seeking $1,750,000 in damages and the case is currently pending.
December 2015. “Claimants allege unsuitable recommendations and breach of fiduciary duty.” The customer is seeking $5,000 in damages and the case is currently pending.
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, WFG Investments, Inc. may be liable for investment or other losses suffered by Bell’s customers.
Erez Law represents investors in the United States for claims against former WFG Investments, Inc. financial advisor Matthew Bell, regarding unsuitable recommendations and misrepresentations related to a pump-and-dump scheme involved a medical education company and two other microcap stocks. If you were a client of WFG Investments, Inc. 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.