The retail investment brokerage unit of banking giant Wells Fargo & Co. will pay more than $2 million in fines and restitution to customers to settle charges stemming from the sale of unsuitable securities to some and failed to provide other buyers with discounts due them, authorities say.
The Financial Industry Regulatory Authority, the securities industry’s self-policing agency, announced Thursday the $2 million fine and unspecified sum in restitution imposed on Wells Fargo Investments LLC.
Finra said former Wells Fargo broker Alfred Chi Chen committed unsuitable sales of reverse convertible securities to 21 customers. Chen also failed to provide sales charge discounts on unit investment trust (UIT) transactions to eligible customers.
As part of the settlement, the firm is required to pay restitution to customers who did not receive UIT sales charge discounts and to provide restitution to certain customers found to have unsuitable reverse convertible transactions.
