Two former Wells Fargo brokers from California have been barred by the Financial Industry Regulatory Authority (FINRA) for allegedly exposing clients to undue risks. The regulator barred California brokers Charles Frieda and Charles Lynch for recommending that clients over-concentrate their investments in energy-sector securities that resulted in significant losses.
According to FINRA, the two brokers recommended an investment strategy involving four speculative energy stocks to a majority of their customers. Between November 2012 and October 2015, the brokers recommended these investments to more than 50 customers, exposing the customers to significant losses.
In addition to the speculative nature of the securities, the volatility of the energy market, and the high level of concentration, the broker also failed to properly consider the customers’ investment profiles. In the complaint filed by FINRA, the agency says that Frieda and Lynch did not properly consider the suitability of their recommendations.
Brokers Terminated for Unsuitable Energy Securities
Charles Frieda and Charles Lynch worked together in Irvine, California. Wells Fargo terminated Lynch in April of this year, followed by Frieda this past August.
Charles Frieda began his securities career at Citigroup in 2008, leaving for Morgan Stanley after one year. He joined Wells Fargo in 2012. Charles Lynch began his securities career in 1999 at Morgan Stanley, followed by a four-year stint at Citigroup, after which he rejoined Morgan Stanley. Lynch also joined Wells Fargo in 2012.
Are You a Victim of Stockbroker Misconduct?
If you lost money as a result of investing with Charles Frieda or Charles Lynch or are a victim of stockbroker misconduct, contact an experienced securities fraud attorney today.
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If you are looking for an attorney to review your rights and options, the securities fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.