Articles Tagged with Wells Fargo Advisers

You can sue Wells Fargo Advisers for investment losses in Good Harbor Financial US Tactical Core and F Squared Investments AlphaSector Allocator Select. Wells Fargo invested clients into this fund, and the bank was sued in June of 2015 for violations of common law fraud, breach of fiduciary duty, negligence and negligent supervision. An arbitration claim has been filed in the Financial Industry Regulatory Authority (FINRA) forum. In an Order filed by the Securities and Exchange Commission (SEC) F Squared, beginning in September 2008, began receiving a signal indicating when to buy or sell an investment. These signals were based on an algorithm, which F Squared,and its President, Howard Present, used to create a portfolio model to track exchange‐traded funds (ETFs). They named the product “AlphaSector” and it quickly became the firm’s largest source of revenue.

Unfortunately, while marketing AlphaSector, the SEC alleged that F Squared falsely advertised the product. They based it on a seven year track record for investment strategy options, but in reality, the product did not even exist for those seven years. The data derived from it was through backtesting, which is the application of a quantitative model to historical market data to generate a hypothetical performance during a prior period. F Squared touted the product as “not backtested” in their marketing materials, which was clearly false. These false statements were made from September 2008 until September 2013.

Wells Fargo and its brokers, have a fiduciary duty to adequately disclose risks involved when recommending products to be sold to clients. They must performdue diligence on an investment to ensure that it is a sound investment and one that is suitable for the investor.  Often, retail clients portfolios were over-concetrated in F Squared related investments.   If they do not make suitable investments, they can be held responsible for investment losses in those products.

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