New York, NY – October 31, 2016 — The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, has opened an industry-wide investigation of brokerage firms into potential Financial Industry Regulatory Authority (FINRA) sales practice violations of “cross selling” incentive programs following targeted examination letter to member firms. According to FINRA, the Targeted Examination Letter sent is designed to review “cross selling programs” used by brokerage firms for FINRA sales practice rules and regulations. This investigation follows regulatory actions against Wells Fargo (NYSE:WFC) and Morgan Stanley (NYSE:MS) for “cross selling” programs which violated securities industry regulations.
The FINRA investigation includes requests for information from member firms concerning incentives paid to brokerage firm employees to “promote bank products of the affiliate or parent company (“affiliate/parent”) to broker-dealer retail customers through referrals or direct sales.” FINRA’s request for information covers the time period of January 1, 2011, through September 30, 2016 for member firms, with a November 30th deadline to comply with request. According to K&T founder, Lawrence L. Klayman, Esq. “Our investigation focuses on whether brokerage firms violated investor rights in the pursuit of corporate profits.” Mr. Klayman explains, “Investors may have sustained damages due to brokerage firms’ failure to supervise the ‘cross selling’ activities of their employees and financial advisors, and those brokerage firms should be held responsible.”
The sole purpose of this release is to determine whether Wells Fargo, Morgan Stanley, or other brokerage firms violated FINRA sales practice rules related to “cross-selling” efforts which may include; unsuitable recommendations, breach of fiduciary duty, misrepresentations and omissions of material facts and a failure to supervise. Investors who have information about the sales practices of brokerage firms and their financial advisors are encouraged to contact Lawrence L. Klayman, Esq. or Raymond Gentile, Esq. of Klayman & Toskes at (888) 997-9956, or visit our website at www.nasd-law.com.