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Wells Fargo settles with SEC over improper sales advice, strategy

Joe Mont | June 26, 2018

The Securities and Exchange Commission announced on Tuesday that Wells Fargo Advisors has agreed to settle charges of misconduct in the sale of financial products known as market-linked investments, or MLIs, to retail investors. 

Wells Fargo Advisors (WFA) is a Delaware limited liability company with its principal place of business in St. Louis, Missouri. It is wholly owned by Wachovia Securities Financial Holdings, which is a wholly owned subsidiary of Wells Fargo & Co. WFA has been registered with the SEC as a broker-dealer since 1987 and as an investment adviser since 1990.

According to the order, the SEC found that Wells Fargo “generated large fees by improperly encouraging retail customers to actively trade the products, which were intended to be held to maturity.” As described in the SEC’s order, the trading strategy,...

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