Wells Fargo Clearing Services, LLC Broker Michael Jorgenson Has Customer Complaint

According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Michael Jorgenson (Jorgenson), currently associated with Wells Fargo Clearing Services, LLC, has at least one disclosable event. These events include one customer complaint, alleging that Jorgenson recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.

FINRA BrokerCheck shows a final customer complaint with a damage request of $323,712.70 on December 18, 2024.

Client alleged, through her attorney, that registered representatives should not have advised her and her husband to diversify their portfolio. Client admitted that the portfolio consisted entirely of just three equity holdings but claims that registered representatives should have waited until her husband passed away to suggest that she diversify the portfolio, because doing so would have enabled her to avoid some capital gains tax. client also stated that in january 2022, registered representatives recommended 2 variable annuities to provide guaranteed income for life, but alleged that the contracts were “facially unsuitable” because they represented 87% of her liquid net worth, and the client moved her account to another firm where she decided to surrender the contracts, incurring surrender penalties. client demands compensation for capital gains taxes, surrender penalties and other damages. occurrence dates: 1/1/2021-1/31/2023.

Brokers must prioritize their clients’ best interests and recommend only appropriate investments, as mandated by securities laws. In addition, the SEC has promulgated “Regulation Best Interest (Reg BI)” which according to the SEC enhanced the broker-dealer standard of conduct beyond existing suitability obligations and requires broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities. Regulation Best Interest and the fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest.

Brokers have an obligation to first obtain and evaluate sufficient information about a retail investor to form a reasonable basis to believe the account recommendations are in the retail investor’s best interest. Recommendations cannot be based on materially inaccurate or incomplete information. Every recommendation’s cost and investor details are essential parts of material information. Types of costs that must be considered including account fees, commissions and transaction costs, tax considerations, as well as indirect costs.

In addition to obligation to understand the customer the broker must also investigate the product being sold. FINRA firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings. A brokerage firm has a special relationship with a customer from the fact that in recommending the security, the broker represents to the customer that a reasonable investigation has been made. Thus, without conducting its own reasonable investigation, a brokerage firm cannot depend solely on the issuer for information about a company.

Another protective measure for investors is the requirement for brokers to disclose. Brokers are required to report events to FINRA, such as customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters, as shown on their BrokerCheck reports. FINRA has recognized that recent studies offer evidence showing that brokers with a past record of regulatory and customer complaint issues are more likely to have such issues in the future. The Office of the Chief Economist (OCE) at FINRA conducted a study revealing that prior disciplinary and disclosure events may serve as indicators of future similar incidents. The OCE study showed that past disclosure events, including regulatory actions, customer arbitrations and litigations of brokers, have significant power to predict future investor harm. The data shows that where a member firm on-boards brokers with a significant history of misconduct there is a high likelihood that the broker will continue to engage in similar behavior.

Jorgenson entered the securities industry in 2017. Jorgenson has been registered as a Broker with Wells Fargo Clearing Services, LLC since 2023.

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.

 

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