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Full-service Brokerage Firms Held Liable for Spousal Theft

Investment fraud lawyers are currently investigating claims on behalf of investors who have been the victim of spousal theft from their full-service brokerage accounts. A recent Financial Industry Regulatory Authority panel decision in Indianapolis ruled in favor of an investor in her case against E*Trade Securities LLC and Wells Fargo Advisors LLC.


Wells Fargo was found liable for $50,253 in compensatory damages to the investor, while E*Trade Securities was found liable for $33,502. Furthermore, E*Trade Securities and Wells Fargo Advisors were ordered to pay attorney fees of $22,500, interest of $11,960, and arbitration hearing session and fees of $4,500.

According to the investor’s securities arbitration lawyer, the investor’s ex-husband exhibited classic signs of identity theft and falsified documents in order to transfer funds from the investor’s Wells Fargo accounts into multiple E*Trade accounts. Reportedly, the investor was unaware of and did not consent to the transfers. The investor’s attorney also stated that the client “was the victim of a very focused and intentional scheme that was permitted to occur – if not facilitated – by both Wells Fargo and E*Trade.” Furthermore, the investor alleged that Wells Fargo Advisors and E*Trade Securities failed to take responsibility for misconduct despite having previous opportunity to do so.

Investment fraud lawyers say incidents like this one, where ex-spouses steal from one another, are becoming disturbingly common. This FINRA decision sends a message to full-service brokerage firms that they can be held liable for investor losses for spousal theft. Full-service brokerage firms should take reasonable precautions to keep investor’s funds safe from theft and can be held liable if they fail to do so.

If you suffered significant losses to your Wells Fargo or other full-service brokerage account because of spousal theft, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

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