San Francisco Attorneys Jeffrey Feldman And Cary Lapidus Have Filed A FINRA Arbitration Relating To An Alleged Ponzi Scheme Involving A Former Wells Fargo Advisors Broker

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The Law Offices Of Jeffrey A. Feldman and the Law Offices of Cary S. Lapidus Currently Represent Sixteen Individual Clients With Claims Against Wells Fargo Advisors, LLC, Relating To An Alleged Ponzi Scheme Involving Promissory Notes, Per Allegations In A Statement Of Claim Filed With FINRA (FINRA Case No. 14-03507).

According to the FINRA Claim, Wells Fargo Advisors Broker Michael J. Frew of San Francisco, California appears to have perpetrated a promissory note scheme over the course of almost two decades. Michael J. Frew (“Mr. Frew”), formerly of Wells Fargo Advisors, LLC (“WFA”), allegedly sold promissory notes to his WFA customers, by assuring them that the notes would provide stable income and safety of principal, per allegations in the claim filed with FINRA. As alleged in the FINRA claim, the Claimants stopped receiving payments on their promissory notes earlier this year.

According to Mr. Feldman, he and Mr. Lapidus “have helped victims of Ponzi schemes in the past, as well as victims of brokerage firms where the brokers have sold investments away from the firm, which it appears Mr. Frew was doing in this particular case.” Mr. Feldman and Mr. Lapidus said that their offices are working together to help victims of Mr. Frew’s alleged wrongdoing. Information about Messrs. Feldman and Lapidus may be obtained through their websites at http://www.jeffreyfeldman.com and http://www.carylapidus.com.

Mr. Feldman explained that “unfortunately, there are many dark sides to the securities industry. One such dark side is brokers selling away from the firm. ‘Selling away’ is a term that generally means a broker has been selling investments to the broker’s clients, without the firm’s consent. Often times, Ponzi schemes are involved with such selling away.” According to Mr. Lapidus, “firms like WFA are required to have policies and procedures reasonably designed to detect and prevent selling away. Selling away and Ponzi schemes are often associated with registered representatives of broker-dealers, because those registered representatives, including Michael Frew in this case, have respected financial institutions backing them, and clients who are turning to them for financial advice.” Per the claim filed with FINRA, the Claimants allege that WFA failed to prevent or detect Mr. Frew’s sales of promissory notes to his WFA clients, or his “selling away” activities.

According to Mr. Feldman based on his knowledge of these types of situations in general, “even though Mr. Frew is apparently being investigated by federal law enforcement, it is very unlikely that Mr. Frew is going to have the funds to pay back his victims.” Mr. Feldman went on to say that “if these victims are going to be made whole, the funds are likely going to have to come from Wells Fargo Advisors.”

Recently Mr. Frew has been banned from the securities industry by the Financial Industry Regulatory Authority (“FINRA”), in their Letter of Acceptance, Waiver and Consent (“AWC”) No. 2014039893701. Additionally, he has been permanently barred from the securities industry in the state of California, per a Consent Order issued by the California Department of Business Oversight. The Consent Order may be viewed at the following link: http://www.dbo.ca.gov/ENF/pdf/2014/FrewMichaelJ_ConsentOrder.pdf

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Jeffrey Feldman
Law Offices of Jeffrey Feldman
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