A FINRA arbitration panel ordered Wells Fargo & Co.'s (WFC) retail brokerage unit to pay retired real-estate broker, Philip Lovell, $1.8 million for losses tied to investments in soda and pharmaceutical companies. Lovell accused Wells Fargo Advisors and Wells Fargo broker, John Bulkley Meacham, of having him invest his money in thinly traded securities that left his portfolio with little diversification and unsuitable for his retirement.
According to the ruling from the Financial Industry Regulatory Authority arbitration panel, Mr. Lovell's claims against Wells Fargo include violation of the firm's fiduciary duty and negligence.
The shares named in the arbitration case were Jones Soda Co. (JSDA), Nektar Therapeutics (NKTR), Poniard Pharmaceuticals Inc. (PARD), and Helicos BioSciences Corp. (HLCSQ). All four took a sizable hits during the financial crisis: shares of Jones Soda and Helicos, for example, fell from $28 and $13, respectively, to below $1.
The broker, John Meacham, had also borrowed $50,000 from his client, Mr. Lovell, interest free and without Wells Fargo's approval. Meacham was suspended for three months, according FINRA's website.
Wells Fargo discharged Mr. Meacham in 2010 for violations related to the handling of records, according to FINRA. He was permitted to resign from Chapin Davis Investments in 2012.
If you are an investor and you feel your stock broker recommended an inappropriate investment or investment strategy that resulted in significant losses, Soreide Law Group offers a free consultation and portfolio analysis to determine if you have legal grounds to pursue a FINRA arbitration. To speak with a lawyer call (888) 760-6552.
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