SAN FRANCISCO—Problems at Wells Fargo continue to mount.
Klayman & Toskes, P.A., a securities arbitration law firm, announced it is investigating whether Wells Fargo Advisors had violated Financial Industry Regulatory Authority’s (FINRA) rules covering the sale of securities, Investopedia.com reported. Wells Fargo Advisors is the brokerage arm of the bank’s Wealth and Investment Management division.
The investigation follows the resignation of Wells President and CEO John Stumpf, who left the organization Wednesday after the bank and the former CEO drew fire from Congress for a scam in which more than two-million bogus accounts were created by employees who have complained they felt pressured to do so. The bank was fined $185 million from regulators for those actions
Wells Fargo also was also recently fined $24 million by the Justice Department and the OCC to settle allegations that it mistreated members of the military – including illegally repossessing their cars.
The investigation into possible FINRA rules violations centers around whether there were unsuitable accounts opened and unsuitable investment recommendations made by employees seeking to perform well in company production contests. The opening of unsuitable or unauthorized investment accounts constitutes a breach of fiduciary duty, made more serious when there are misrepresentations and omissions of material facts involved in the process, Investopedia.com reported.