• December 10, 2023
• Wells Fargo Advisors

George John Cairnes (CRD#: 4068906) was a previously registered investment advisor and broker.

Broker’s Background

He entered the securities industry in 2000 and has previously worked for Chelsea Financial Services; Wells Fargo Clearing Services, LLC; Wells Fargo Investments, LLC; Stanford Group Company; and Merril Lynch, Pierce, Fenner, & Smith Incorporated.

Current Allegations of Conduct Leading to Investment Loss

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in June 2023, George Cairnes was terminated by Wells Fargo after an allegations review determined that, “the FA facilitated a loan between clients as well as loans and other transactions between a client and individuals associated with the FA.”

In addition, George Cairnes has been the subject of three other disclosures, including the following:

• April 2023—“Customer complains that she set up a line of credit to loan money to the financial advisor, his family members and his friends, and a portion of which has not been repaid, resulting in her line of credit having an outstanding balance. (5/1/2015-4/26/2023).” The customer dispute is still pending.
• May 2013—“THE CLIENT ALLEGES THAT THE OPTION TRADING STRATEGY WAS NOT APPROPRIATE CONSIDERING THE CURRENT PERFORMANCE OF THE UNDERLYING SECURITY. ADDITIONALLY, THE CLIENT ALLEGES THE FA MISREPRESENTED THE EXPECTED RETURN AND THE RISK TO HIS PRINCIPLE INVESTMENT. (2/14/13-3/14/13).” The customer dispute was denied.
• August 2009—“CLIENT ALLEGES THAT REP RECOMMENDED AN UNSUITABLE MORTGAGE CAUSING DAMAGES IN EXCESS OF $125,000.” The customer dispute settled for $19,766.

For a copy of George Cairnes FINRA BrokerCheck, click here.

 

George John Cairnes (CRD#: 4068906) was a previously registered investment advisor and broker.

Broker’s Background

He entered the securities industry in 2000 and has previously worked for Chelsea Financial Services; Wells Fargo Clearing Services, LLC; Wells Fargo Investments, LLC; Stanford Group Company; and Merril Lynch, Pierce, Fenner, & Smith Incorporated.

Current Allegations of Conduct Leading to Investment Loss

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in June 2023, George Cairnes was terminated by Wells Fargo after an allegations review determined that, “the FA facilitated a loan between clients as well as loans and other transactions between a client and individuals associated with the FA.”

In addition, George Cairnes has been the subject of three other disclosures, including the following:

• April 2023—“Customer complains that she set up a line of credit to loan money to the financial advisor, his family members and his friends, and a portion of which has not been repaid, resulting in her line of credit having an outstanding balance. (5/1/2015-4/26/2023).” The customer dispute is still pending.
• May 2013—“THE CLIENT ALLEGES THAT THE OPTION TRADING STRATEGY WAS NOT APPROPRIATE CONSIDERING THE CURRENT PERFORMANCE OF THE UNDERLYING SECURITY. ADDITIONALLY, THE CLIENT ALLEGES THE FA MISREPRESENTED THE EXPECTED RETURN AND THE RISK TO HIS PRINCIPLE INVESTMENT. (2/14/13-3/14/13).” The customer dispute was denied.
• August 2009—“CLIENT ALLEGES THAT REP RECOMMENDED AN UNSUITABLE MORTGAGE CAUSING DAMAGES IN EXCESS OF $125,000.” The customer dispute settled for $19,766.

For a copy of George Cairnes FINRA BrokerCheck, click here.

 

We Help Investors Recover Investment Losses

Pursuant to FINRA Rule 3270, outside business activities in which Financial Advisors become involved must be disclosed.  This is in order to ensure that Financial Advisors do not engage in selling away.  The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.

 

The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.

 

Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.

 

Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.

 

Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.

 

Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s age, tax status, time horizon, liquidity needs, and risk tolerance; a client’s other investments, financial situation and needs, investment objectives, and any other information disclosed by the customer should also be considered.

 

The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (800) 931-8452 or by email at mwolper@wolperlawfirm.com.

Pursuant to FINRA Rule 3270, outside business activities in which Financial Advisors become involved must be disclosed.  This is in order to ensure that Financial Advisors do not engage in selling away.  The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.

 

The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.

 

Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.

 

Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.

 

Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.

 

Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s age, tax status, time horizon, liquidity needs, and risk tolerance; a client’s other investments, financial situation and needs, investment objectives, and any other information disclosed by the customer should also be considered.

 

The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (800) 931-8452 or by email at mwolper@wolperlawfirm.com.