Were you the victim of investment losses due to recommendations by former Wells Fargo Clearing Services, LLC broker John Dougherty (CRD# 3018615)?
He was registered with LPL Financial LLC in Blue Bell, Pennsylvania, from 2021 to 2023, when he was terminated related to allegations that he, “Engaged in outside business activity without Firm approval. Participated in private investments without Firm approval.”
The terms of his termination might indicate that he engaged in outside business activities that were not approved by his member firm, a practice also known as selling away.
Previously, he was registered with Wells Fargo Clearing Services, LLC in Collegeville, Pennsylvania, from 2013 to 2021.
In December 2023, FINRA barred him after he agreed to the sanction and admitted to findings that he failed to provide information and documents requested by FINRA during their investigation into his alleged undisclosed outside business activities and private securities transactions.
John Dougherty Customer Complaints
He has been the subject of one customer complaint, according to his CRD report:
January 2023. “Customer alleges representative recommended a wealth management strategy which was inappropriate for his investment objectives and risk tolerance, and that he allegedly incurred losses as a result of the strategy. Time period: April 2013 to October 2021.” The case is currently pending. The complaint was regarding debt-backed assets, common and preferred stocks, and private placement losses, and it took place while he was registered with LPL Financial LLC.
According to the complaint, the broker recommended the client invest $300,000 in Jamaica Cures, LLC, a Jamaica-based medical marijuana grower. It is alleged that he told the client that he was an investor and served on the board for the company; in 2020, the client learned that John Dougherty lost his entire principal in the investment.
According to AdvisorHub, the client lost millions of dollars, had to sell his house, and lost his financial security. It is reported that the broker also recommended that the client take out a loan to cover $5 million in taxes and other financial obligations, after the client sold his business for a $9.5 million profit. AdvisorHub reported that the broker told his client the loan would allow him to “generate income from the full proceeds to cover living expenses and pay down interest. But it really allowed Dougherty to benefit by charging management fees on the gross investment while also receiving credit for interest payments on the loan.” Regrettably, this investment approach unknowingly exposed to great market risk.
Additionally, it is reported that the broker did not recommend that the client pay down the loan; instead, he would need to generate a minimum of 3.5% to pay the annual advisory fee and interest on the investment.
It is reported that in March 2020, he began selling off the equity holdings in the client’s account to “protect” himself and Wells Fargo from losing their collateral on the loan. According to AdvisorHub, he then frantically traded in June and July 2020, including “buying precious metal stocks and day trading Vanguard ETFs even though the account had a “moderate growth” risk tolerance.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Wells Fargo Clearing Services, LLC may be liable for investment or other losses John Dougherty’s customers suffered.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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