Securities Lawyers Blog
Financial advisor James Paige (Paige), currently employed by brokerage firm Wells Fargo Clearing Services, LLC (Wells Fargo) has been subject to at least five customer complaints and one tax lien or judgement during the course of his career. According to the most recent complaints, Paige has been accused by customers of engaging in unsuitably risky investments among other allegations against the financial advisor.
In February 2024 a customer complained that Paige violated the securities laws by alleging that Paige in or around the year 2021 made financial recommendations that were unsuitable and too risky for Claimants’ investment knowledge and needs. The claim is currently pending.
In May 2023 a customer complained that Paige violated the securities laws by alleging that Paige, sometime after 2020, failed to diversity her portfolio and made unsuitable investment recommendations without disclosing the risks involved with the investments. The claim settled for $95,000.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a “best interest” standard for broker-dealers and associated persons. This standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest.
There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions. Next, the advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. Finally, the advisor must use their knowledge of the first two elements to consider reasonably available investment option alternatives and come to the conclusion that there is a reasonable basis to believe that the recommendation or advice being provided is in the retail investor’s best interest.
An advisor must understand the type of account, securities, and their client in order to meet their care obligations. The type of securities account has the potential to greatly affect retail customers’ costs and investment returns. Different types of securities accounts can offer different features, products, or services, and not all types of accounts or services would be in every investor’s best interest.
Paige entered the securities industry in 1987. Since October 2008 Paige has been associated with Wells Fargo out of the firm’s Vera Beach, Florida office location.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.