Kenneth Ibbetson, a broker and investment advisor with Wells Fargo Clearing Services, LLC, is currently under investigation by Haselkorn & Thibaut, a national investment fraud law firm, following allegations of charging improper commissions to liquidate securities in an advisory/fiduciary account. The customer dispute, filed on February 3, 2024, and currently pending resolution, claims that Ibbetson should not have charged commissions for these transactions between May 18, 2023, and August 14, 2023.
According to Ibbetson’s FINRA BrokerCheck report, he has been registered with Wells Fargo Clearing Services, LLC (CRD# 19616) in California since August 19, 2016, serving as both a broker and an investment advisor. The recent complaint raises concerns about potential misconduct and the need for further investigation.
Investment fraud and bad advice from financial advisors can have devastating consequences for investors. According to a study by Forbes, investment fraud costs Americans billions of dollars each year, with many victims being elderly or inexperienced investors who trust their financial advisors to act in their best interests.
Understanding the allegation and FINRA rules
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The customer’s complaint revolves around the issue of charging commissions for liquidating securities within an advisory or fiduciary account. In simple terms, when an investor has an advisory or fiduciary account, the financial advisor is expected to act in the client’s best interests and adhere to a higher standard of care. Charging commissions for transactions in such accounts may be seen as a conflict of interest or a breach of fiduciary duty.
FINRA, the Financial Industry Regulatory Authority, has specific rules in place to protect investors and ensure that financial advisors act ethically and transparently. One such rule, FINRA Rule 2111, known as the “Suitability Rule,” requires brokers to have a reasonable basis for believing that a recommended transaction or investment strategy is suitable for the customer, based on the customer’s investment profile.
The importance for investors
This case highlights the significance of understanding the fees and commissions associated with different types of investment accounts. Investors should be aware of the distinction between advisory or fiduciary accounts and traditional brokerage accounts, as the former typically involves a higher level of trust and responsibility on the part of the financial advisor.
When financial advisors breach this trust by charging improper commissions or engaging in misconduct, it can result in significant financial losses for investors. It is crucial for investors to remain vigilant, regularly review their account statements, and question any suspicious or unauthorized charges.
Red flags and recovering losses
Investors should be mindful of several red flags that may indicate financial advisor malpractice, such as:
- Unauthorized or excessive trading
- Lack of transparency regarding fees and commissions
- Pressure to make unsuitable investments
- Failure to disclose conflicts of interest
If an investor suspects misconduct or has suffered financial losses due to improper actions by their financial advisor, they may be able to recover damages through FINRA arbitration. Haselkorn & Thibaut, with offices in Florida, New York, North Carolina, Arizona, and Texas, has over 50 years of combined experience in handling investment fraud cases and boasts an impressive 98% success rate in financial recoveries for investors.
Haselkorn & Thibaut operates on a “No Recovery, No Fee” basis, meaning clients only pay if the firm successfully recovers their losses. Investors who believe they may have been affected by misconduct or inappropriate actions by Kenneth Ibbetson or Wells Fargo Clearing Services, LLC are encouraged to contact Haselkorn & Thibaut for a free consultation by calling their toll-free number, 1-888-885-7162 .
