In October 2018, a former client of Wells Fargo Advisors, LLC won an award in a FINRA arbitration for compensatory damages for $172,000, plus $68,800 in attorney’s fees and $100,000 in punitive damages, and $20,000 in costs for losses sustained from unsuitable investments in the high risk energy sector.
The causes of action included violations of federal securities laws; violation of the North Dakota Unlawful Sales or Advertising Practices Act; violation of the North Dakota Securities Act; breach of contract; common law fraud; breach of fiduciary duty; negligence; and gross negligence. The causes of action relate to the purchase of numerous investments, including but not limited to: Oasis Petroleum, Inc.; Ritchie Bros Auctioneers, Inc.; TCF Financial Corp.; Arts-Way MFG Co., Inc.; Monsanto Co New; James River Coal, Inc.; Intrepid Potash, Inc.; CNH Global NV; BP PLC SPONS ADR; and Pengrowth Energy Corp. The FINRA arbitration hearing was conducted in Tampa, Florida.
Over the past few years, oil prices have significantly declined. A supply glut in 2014 and 2015 led to some of the lowest prices the market has seen in recent years. In turn, securities values also dropped. The volatile energy sector experienced significant turmoil, and many energy companies were negatively impacted when global crude oil prices fell below $40 per barrel at the end of 2015. This was the lowest level since early 2009, as supply was in excess of global demand. Oil and gas companies experienced a spike in bankruptcies, which have left many investors reeling.
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 may be liable for investment or other losses suffered by its customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and 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.
"*" indicates required fields
