According to public records recently published by the Financial Industry Regulatory Authority (FINRA), investors have filed fifty-three separate FINRA arbitration claims against former Wells Fargo broker Charles Henry Frieda. While at Wells Fargo, Charles Frieda partnered with another broker, Charles Lynch, who was also involved in the alleged conduct. The claims alleged Charles Frieda recommended and misrepresented unsuitable investments to his clients between 2012 and 2017.
Fifty-one of the claims were filed between January 28, 2015 and February 16, 2018. Wells Fargo has settled forty-nine of the customers’ claims for monetary amounts, with the four largest settlements ranging between $490,000 and $850,000.
On December 11, 2017, FINRA signed a Letter of Acceptance, Waiver and Consent (“AWC”) that barred Charles Frieda from any future association with a firm registered with FINRA. According to the AWC, FINRA barred Charles Frieda for allegedly violating FINRA rules by recommending unsuitable investment strategies to his customers. The AWC states FINRA found, between November 2012 and October 2015, Charles Frieda recommended an over-concentration in energy-sector securities, some of which were speculative. Frieda agreed to be barred by signing the AWC, which states he did not admit or deny any of FINRA’s findings.
Strategies reportedly recommend by Charles Frieda included concentrations as high as 50% in oil-and-gas exploration companies such as Halcon Resources Corp. and the now bankrupt Magnum Hunter Resources.
In 2015, the energy sector began a stark downturn. FINRA has claimed, at that time, Charles Frieda recommended some of his customers remain in over-concentrated energy securities strategies, which caused them millions of dollars in collective losses.
Public FINRA and Securities Exchange Commission records reflect the following employment records for Charles Frieda. He worked for Morgan Stanley from June 2009 through October 2012. From October 2012 through September 2016, he was a registered as a General Securities Representative and Investment Advisor Representative with Wells Fargo and worked in Irvine, California. He has not been employed in the securities industry since May 2016.
Options to Pursue a Recovery of Investment Losses
Rules and regulations require brokers and advisors, like Charles Frieda, recommend only suitable investment products and strategies to their customers. Suitability is based on factors such as a customer’s age, investment objective, risk tolerance, investment experience, and financial status and needs. Strategies concentrating an investor’s portfolio in one market sector increases the investor’s exposure to risks that his or her portfolio will experience sudden and severe investment losses. Moreover, risks associated with oil and gas stocks and stocks in smaller companies can make them unsuitable investments for many people.
Further, brokerage firms, like Wells Fargo, have a duty to closely monitor and supervise their financial advisor’s conduct to ensure they follow securities rules and regulations. That includes supervising brokers to ensure they only recommend suitable investment products and strategies. A firm’s duty to supervise its broker’s conduct is heightened when he has a history of regulatory violations.
If you have suffered investment losses with Charles Frieda, contact Marquardt Law Office LLC to speak with a securities attorney and receive a free evaluation of your recovery options.
Marquardt Law Office LLC is a securities law firm located in Chicago, IL that represents clients nationwide who have suffered losses due to misconduct such as fraud and negligence.
