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May 29, 2014 at 10:18 AM
FINRA barred an ex-Wells Fargo advisor (WFC) from the investment industry earlier this week.
Michael Frew, a Bay Area resident, retired from Wells Fargo Advisors in January after the bank opened an internal investigation regarding a client’s attempt to wire money into the advisor’s bank account.
Over the past few months, Frew failed to “fully and accurately respond to a … request for documents and information and refused to appear for testimony requested …. Thereby violating FINRA Rules 8210 and 2010,” the regulatory body said in a document, signed by Frew on Monday.
FINRA started investigating whether he had taken loans from customers or converted customer funds in February. In May, Frew told FINRA that he would not provide any responses and would not appear for testimony.
There are several client disputes in his FINRA records, and now, some investors are seeking to sue the ex-advisor over money they lost investing in some unofficial real estate schemes, according to a report in the San Francisco Chronicle.
Some 20 clients and 10 other investors allege that Frew, 66, “solicited millions of dollars from friends, family and clients that he said would be used by a real estate developer to rehabilitate properties in areas hit by natural disasters.” He promised them payments of 10% to 14% per year.
Suzanne Geer of Pacifica, Calif., told the paper she became a client of Frew’s in 1998 after her husband died. Frew explained to Geer that he knew someone redeveloping property after the Oakland hills fire of 1991.
“I asked who he is. He said, ‘Let’s just call him Guido,’ ” Geer told the paper.
“We are still investigating, but we believe this looks like a Ponzi scheme, and there likely was never any investment in these distressed properties,” San Francisco attorney Cary Lapidus told the Chronicle.
Lapidus said he plans to file an arbitration claim soon against Wells Fargo Advisors on behalf of certain clients.
“The investigation continues and we are working with clients, industry regulators and law enforcement to gather information concerning Mr. Frew’s activity outside of accounts at Wells Fargo,” the company said last week in a statement shared with the paper.
