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 without customer knowledge; boosting sales figures and raking in unwarranted fees. Wells Fargo also discovered that hundreds of thousands of customers had been enrolled in online bill pay without their authorization.
If you or someone you know has lost money or was misled into the purchase of an unsuitable exchange-traded product, while a Wells Fargo customer or otherwise, please call the Frankowski Firm at 888.741.7503 or fill out this contact form.