Monthly Archives: September 2021

David Wells of Fifth Third

David Wells of Fifth Third in the Chicago area has surrendered his license after failing to comply with a regulatory investigation into his actions.  If you believe you have suffered losses due to the misdeeds of Wells please call 303-300-5022.  Initial consultation is free and confidential.  We believe his former employers may be responsible.

investingstockphoto 1In June of 2021, Wells resigned from First Third.  This was after admitting that he misappropriated funds from the accounts of three clients.  A brokerage is required to file a Form U5 upon a broker’s employment termination.  This form, filed with the regulators, identifies the circumstances surrounding the termination.  Upon the receipt of the Wells U5, the regulator FINRA began an investigation.  FINRA, the Financial Industry Regulatory Authority, acts under the oversight of the SEC.   This regulator is charged with the regulation of securities brokerages.  Brokers are required to cooperate with FINRA investigations.

Wells chose to not cooperate with the investigation and was barred from the securities industry as a result.  A regulatory settlement agreement identifies that Wells consented to this action.

Prior to his employ with Fifth Third Securities, Wells was a broker of Merrill Lynch.  Wells is relatively young with only four years of experience at the time of the action.  Brokerage firms generally are responsible for training and supervising such young attorneys to guard against negligence and misdeeds.

Ameritrade Option Failure

If you have suffered losses from Ameritrade’s failure to appropriately assign options within its system, please contact our offices at 303-300-5022.

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Substantial damage occurred when Ameritrade confused long and short options.

During the period between February 10 through February 19, 2021, we believe the system of Ameritrade malfunctioned and treated certain long trades and short trades and vice versa.  Investors suffered margin maintenance calls and lost value in their portfolios by the incorrect liquidation of their Ameritrade accounts at low points.

Securities broker-dealers have fiduciary duties to correctly execute trades.  Brokerages also have obligations under Regulation T, and their duty to act in good faith that prevents them from mismarking long trades as short trades.

As such, investors have many avenues to seek recovery when the circumstances occur.  Please call for a free and confidential initial consultation.

The Law Offices of Jeffrey Pederson specializes in the handling of suits against securities brokerages.  Such suits are required to resolve their disputes through binding arbitration administered by the Financial Industry Regulatory Authority (FINRA).  This is is a specialty only a small percentage of attorneys possess.  Jeffrey Pederson has handled such cases for approximately 20 years.

NEXT Financial Excessive Trading

On July 13, 2021, NEXT Financial entered into a regulatory settlement for excessive trading.   In the settlement,  the regulator censured, fined $750,000 and required NEXT to certify that it has implemented supervisory systems and procedures reasonably designed to address the issue.  If you believe you have a potential claim, call 1-866-817-0201.

investingstockphoto 1The trading issues stem from unsuitable short-term trading of mutual funds and municipal bonds in customer accounts and over-concentration of customer accounts in Puerto Rican municipal bonds. Without admitting or denying the findings, the NEXT consented to the sanctions and to the entry of findings that it failed to establish, maintain and enforce a supervisory system, including written supervisory procedures, reasonably designed to detect and prevent unsuitable short-term trading of mutual funds and municipal bonds in customer accounts and over-concentration of customer accounts in Puerto Rican bonds.

Rules concerning suitability and excessive trading are designed to protect investors from excessive risk which an investor is not prepared or willing to take.  The motivation for such unsuitable investments is generally a heightened commission to the broker.  In the case of turnover of mutual funds, the costs and commissions incurred from sale and repurchase are much higher than the investor can reasonably re-earn if even the account is turned-over only a few times.