Richard Hughes, a former Wells Fargo advisor, has been suspended for 8 months and fined $10,000 by the Financial Industry Regulatory Authority, Inc. (FINRA). Allegedly, Hughes made unsuitable recommendations in unit investment trusts (UITs) and attempted to get a client to make false statements about commissions, according to a letter of acceptance, waiver and consent published by FINRA.
According to FINRA, from April of 2015 to May of 2016, Richard Hughes allegedly recommended his 72-year-old client switch often between UITs and class A shares of mutual funds. They are both meant to be held long-term according to FINRA. During this period, FINRA states, the client’s account was charged over $34,000 in commission fees. The markups on the UITs ranged from 3.5% and 3.8% and the up-front sales charges on the mutual funds were between 2.7% and 3%.
FINRA stated that a Wells Fargo alert was triggered when one of the client’s mutual funds was sold less than a year after its purchase. Then, Hughes allegedly lied to his supervisor stating the client was aware of the costs involved. After the supervisor told Hughes the 72-year-old client would be notified, allegedly Hughes met with the client and gave her a script to read to his supervisor, which contained false information, according to FINRA.
Allegedly, the elderly client didn’t read the script when contacted by the supervisor. According to FINRA, the client told the supervisor she wasn’t aware of the commissions she was being charged and that Richard Hughes had given her a script to read to the supervisor.
According to FINRA’s BrokerCheck, Richard Hughes had been in the securities industry since 1986 and with Wells Fargo from 2011 until he was terminated in October of 2016. Hughes then was registered with Summit Brokerage Services in November 2016 and resigned from the firm on June 1 of this year, according to the letter of consent.
If you or an elderly family member suffered losses due to the actions or recommendations of former Wells Fargo advisor, Richard Hughes, call Soreide Law Group for a free consultation with an experienced securities attorney to determine the possibility of recovering your losses through a FINRA arbitration at: 888-760-6552.
Soreide Law Group works on a contingency fee and represents our clients nationwide before FINRA.
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