At Sonn Law Group, we are committed to protecting the interests of investors nationwide. Our investor protection team is currently investigating complaints against Wunderlich Securities (CRD#: 2543). This broker-dealer is based in Memphis, Tennessee and is licensed to operate in 53 U.S. states and territories.
Wunderlich Securities: Customer Disputes and Regulatory Actions
Lack of Diversification: Risky Energy Holdings
In April of 2017, an Ohio couple brought a negligence claim against Wunderlich Securities. This claim eventually went before a Cleveland-based FINRA arbitration panel. The underlying dispute involved major losses that were related to allegedly risky energy sector investments. More specifically, the investors argued that the brokerage firm has over concentrated their assets, thereby considerably increasing their overall level of risk.
When the energy market turned sharply downward, the couple lost far more money than they believe should have been possible. Upon reviewing the claim, the FINRA arbitration panel agreed with the investors. Wunderlich Securities was ordered to pay total of $1,044,782 in financial compensation.
Failure to Properly Identify Risks Associated With Non-Traditional ETFs
In October of 2015, securities industry regulators found that certain financial advisors at Wunderlich Securities were recommending non-traditional exchange traded funds (ETFs) to investors. In this cases, the ETF recommendations were inappropriate because the financial advisors failed to properly explain the risks.
Registered brokerage firms and their representatives have a professional obligation to ensure that all customers fully understand the risks that are associated with their investments. As a result of the findings, Wunderlich Securities was publicly censured and fined $50,000.
In June of 2014, FINRA’s Department of Market Regulation determined that Wunderlich Securities had sold more than 271 million shares of lightly traded unregistered securities, without ensuring that these sales were actually allowed under any of the approved exemptions for registration.
As a general rule, all securities should be registered with the appropriate federal or state agency. Unregistered securities can only be sold in a very limited set of circumstances. This misconduct was a major violation of industry rules, and it put innocent investors at considerable risk. FINRA ordered Wunderlich Securities to pay a fine of $108,343 along with full financial restitution and the disgorgement of any ill gotten gains.
At Sonn Law Group, we fiercely advocate for the legal rights of investors. Please do not hesitate to contact our team today to schedule your free legal consultation. Our law firm is based in South Florida and we represent investors throughout the United States. We only get paid if we win your case.