The Financial Industry Regulatory Authority has barred former Wells Fargo reps Charles Frieda and Charles Lynch for recommending an over-concentration in energy-sector securities, some of which were speculative, resulting in significant customer losses.
Finra said that between November 2012 and October 2015, the two brokers, who worked together in Irvine, Calif., recommended an investment strategy involving four speculative energy stocks to more than 50 customers, which was a majority of their customers.
Due to the speculative nature of the securities, the volatility of the energy market and the high level of concentration, Finra said, the strategy exposed customers to significant potential losses.
The two brokers failed to properly consider and obtain accurate customer investment profile information to determine the suitability of their recommendations, Finra said.
(More: Retired Morgan Stanley rep fined for unsuitable advice.)
Mr. Frieda was terminated by Wells Fargo this past August. Mr. Lynch was terminated in April 2016. Neither is currently employed in the securities business.
Mr. Frieda began his securities career in 2008 at Citigroup, left for Morgan Stanley in 2009 and joined Wells Fargo in 2012, according to Finra's BrokerCheck website. Mr. Lynch began his securities career in 1999 at Morgan Stanley then worked at Citigroup from 2005 to 2009, when he rejoined Morgan Stanley. Mr. Lynch started at Wells Fargo in 2012.
