Wells Fargo 10-K Discloses Investigation Into Improper Referrals and Recommendations

The Department of Justice and Securities and Exchange Commission (SEC) have demanded an investigation into whether Wells Fargo investment advisors made inappropriate referrals or recommendations to investors. The advisors may have received bonuses, fees, or other compensation for making these referrals.

According to a recent disclosure by Wells Fargo, you may be affected if you:

  • Used Wells Fargo’s services to reinvest your 401(k) retirement funds into an investment retirement account (IRA) or a new employer’s 401(k) plan; or
  • Were urged by a Wells Fargo advisor to invest in “alternative investments” or non-standard investments; or
  • Had your Wells Fargo stockbroker recommend that you put money into a managed investment account or into a fiduciary account (such as a trust fund).

It’s hard to know for sure if you are affected. Call us for a free consultation with one of our attorneys.

Call:  866-433-6779


Wells Fargo 10-K Discloses Investigation Into Improper Referrals and Recommendations

On March 1, 2018, Wells Fargo disclosed in its 10-K filing with the SEC that “in response to inquiries from federal government agencies,” the company’s Board of Directors was conducting a “review of certain activities within Wealth and Investment Management (WIM),” one of the company’s investment advisory departments. Wells Fargo disclosed that the investigation was focusing on “inappropriate referrals and recommendations” with respect to “rollovers for 401(k) plan participants, certain alternative investments, or referrals of certain brokerage customers to the Company’s investment and fiduciary services businesses.”

A 401(k) rollover usually occurs when someone leaves their current employment. They need to roll their retirement funds into a new investment account. They can choose to roll the funds into an IRA or into a new 401(k), such as a new employer’s retirement plan. An “IRA” is a type of investment account that allows people to save for retirement, without having to pay taxes on any investment gains. A 401(k) rollover, done correctly, allows an individual to maintain tax-free or tax-deferred status on their funds while placing them in a new investment account.

If you had a 401(k) and had Wells Fargo roll your funds into an IRA or new 401(k), you may have been affected. Give us a call to have a free, confidential discussion with one of our attorneys.

People who were urged by a Wells Fargo investment advisor to put money into “alternative investments” may also be impacted. An “alternative investment” is any investment that falls outside the conventional investment types of stocks, bonds, and currency. Types of “alternative investments” include private equity, hedge funds, managed futures, real estate, commodities (such as oil and gold), and derivatives contracts (such as the mortgage-backed securities and credit default swaps that contributed to the 2008 financial crisis).

If you were urged by a Wells Fargo employee to invest in any non-conventional investments, you may be affected. Our attorneys are available for a free and confidential consultation to discuss your situation and options.

Lastly, people may have been improperly referred by their stockbrokers to use a Wells Fargo investment advisor or fiduciary. Stockbrokers typically make money on the trades that you make by taking a flat fee or percentage of each trade. In contrast, investment advisors often charge an annual fee in order to manage your money and invest it for you. And fiduciaries allow you to put money into an account to be managed for someone else. People often set up trust accounts for their children, and pay a Wells Fargo trustee to manage the funds until their children are older.

If your stockbroker recommended that you use a Wells Fargo investment advisor or trustee, you may be affected.

Contact us to learn more.


Sanders Phillips Grossman is working with the law firm Girard Gibbs LLP in investigating potential claims.

Call:  866-433-6779


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