Simon Leung, a financial advisor with Wells Fargo Clearing Services, LLC, is currently under investigation by Haselkorn & Thibaut, a national investment fraud law firm, following allegations of recommending unsuitable investments to a customer. The customer complaint, filed on November 22, 2023, and denied on February 15, 2024, claims that Leung recommended purchasing a variable annuity that was not in the customer’s best interest due to the risk of loss and surrender penalty.
Haselkorn & Thibaut is offering free consultations to clients who may have suffered losses due to Leung’s alleged misconduct. With offices in Florida, New York, North Carolina, Arizona, and Texas, the firm has over 50 years of experience and a 98% success rate in helping investors recover losses through FINRA arbitration. Investors can contact Haselkorn & Thibaut toll-free at 1-888-885-7162 for a free consultation, and the firm operates on a “No Recovery, No Fee” policy.
Understanding the allegations and FINRA rules
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The customer complaint against Simon Leung alleges that he recommended an unsuitable investment, specifically a variable annuity, which exposed the customer to undue risk of loss and a surrender penalty. FINRA Rule 2111, known as the “Suitability Rule,” requires financial advisors to have a reasonable basis to believe that a recommended investment or investment strategy is suitable for the customer, based on the customer’s investment profile, risk tolerance, and financial situation.
Variable annuities are complex investment products that combine features of insurance and securities investments. They often have high fees, surrender charges, and potential market risks. Financial advisors must carefully consider a customer’s needs and risk tolerance before recommending such products. According to a recent Forbes article, variable annuities may not be suitable for all investors due to their complexity and potential drawbacks.
The impact on investors
When financial advisors recommend unsuitable investments, investors can suffer significant losses. In the case of variable annuities, investors may face high surrender charges if they need to withdraw funds early, and the investment’s value may fluctuate with market conditions, potentially leading to a loss of principal.
Investors trust their financial advisors to provide sound guidance and recommendations that align with their best interests. When advisors breach this trust by recommending unsuitable investments, it can have a detrimental impact on an investor’s financial well-being and future. According to a study by the North American Securities Administrators Association (NASAA), unsuitable recommendations are one of the most common types of investment fraud.
Red flags and recovering losses
Investors should be aware of red flags that may indicate financial advisor malpractice, such as:
- Recommendations that do not align with the investor’s risk tolerance or financial goals
- Inadequate disclosure of fees, risks, or surrender charges
- Excessive trading or churning of accounts to generate commissions
If an investor believes they have suffered losses due to financial advisor misconduct, they may be able to recover damages through FINRA arbitration. FINRA, the Financial Industry Regulatory Authority, operates a dispute resolution forum where investors can file claims against brokers and brokerage firms.
Haselkorn & Thibaut has extensive experience representing investors in FINRA arbitration proceedings. Their team of attorneys works diligently to help investors recover their losses and hold financial advisors accountable for their actions. With a 98% success rate and a “No Recovery, No Fee” policy, Haselkorn & Thibaut is committed to protecting investors’ rights and interests.
Investors who have worked with Simon Leung (CRD#: 5376696) or Wells Fargo Clearing Services, LLC and believe they may have been affected by unsuitable investment recommendations are encouraged to contact Haselkorn & Thibaut at 1-888-885-7162 for a free consultation.
