Misrepresentation and Fraud

The Frankowski Firm is investigating potential claims against terminated Wells Fargo broker Jeffrey Palish, of Woodcliff Lake, New Jersey, following Mr. Palish’s arrest and termination from the securities industry on charges that he stole at least $600,000 from elderly clients over four years. According to the story published at northjersey.com, Mr. Palish is believed to have borrowed $100,000 from two of his clients, failed to report the loan to his employer, and failed to make payments on the loan. Moreover, Mr. Palish allegedly stole money from his clients by converting their stock holdings, which he sold and the money placed into a separate bank through checks written by his clients. Palish is also accused of completing approximately 40 unauthorized wire transfers to make payments on his personal credit card, totaling $300,000. If you or someone you know lost money as a client of Jeffrey Palish or Wells Fargo due to unsuitable, misrepresented, or unauthorized transactions, please call the Frankowski Firm [...]

Last week, the Financial Industry Regulatory Authority (“FINRA”) ordered Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC to pay more than $3.4 million in restitution to investors based on Wells Fargo’s unsuitable recommendation of volatility-linked exchange-traded products (ETPs) and related supervisory failures. FINRA found that between July 2010 and May 2012, certain Wells Fargo representatives recommended their clients purchase volatility-linked ETPs, selling them as a long-term hedge on their customers’ equity positions in the event of a market downturn. Instead, volatility-linked ETPs are generally short-term products that lose value significantly over time and are not suitable as part of a long-term buy-and-hold strategy. FINRA further found that Wells Fargo failed to implement a reasonable system to supervise sales of these solicited purchases during the time period at issue. This is the most recent regulatory run-in for Wells Fargo, which admitted in August to having found up to 3.5 million potentially fake bank and credit card accounts [...]

An arbitration panel of the Financial Industry Regulatory Authority (“FINRA”) has ordered Morgan Stanley to pay $200,000 plus interest to one if its customers while also rescinding her investment in a variable annuity, with a waiver of any surrender fees. The panel found that although the Morgan Stanley broker, Helen Holmes Timpe (formerly of the Morgan Stanley branch office in Newport Beach, California) placed the customer in a SunAmerica variable annuity in November 2013, it was not clear that the customer actually authorized the purchase until January 2014. The Panel further found that the claimant was first informed about the fees associated with the annuity via a prospectus after it was too late and the purchase had already been made. Moreover, the claimant alleged that she was promised a six percent rate of return which she did not receive. This award is the latest example of FINRA’s emphasis on punishing and deterring variable annuity misconduct. Variable annuities are insurance products [...]