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Financial Advisor Xiangyu Zhang Has Ten Customer Complaints And Regulatory Infractions

Xiangyu Zhang (CRD#: 5050282), also known as Sean Zhang, is a previously dually registered Broker and Investment Advisor.

Broker’s Background

He entered the securities industry in 2005 and previously worked for Wells Fargo Clearing Services, LLC; LPL Financial LLC; Cetera Investment Services, LLC; Merrill Lynch, Pierce, Fenner & Smith, Inc.; Banc of America Investment Services, Inc.; Citigroup Global Markets, Inc.; Citicorp Investment Services; and WM Financial Services, Inc.

Current And Past Allegations Of Conduct Leading To Investment Loss

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in April 2022, a customer dispute was filed against Xiangyu Zhang. The allegation states, “Claimant alleges unsuitable investment recommendations which resulted in losses.” The customer dispute is pending.

In addition, Xiangyu Zhang has been the subject of 9 customer complaints, including four that remain pending, a series of regulatory disclosure events and employment separations, including the following:

  • November 2021 — “Claimants allege that their registered representative made unsuitable investment recommendations that resulted in losses.” The customer dispute is pending.
  • August 2021 — “Claimants allege that registered representative recommended unsuitable investments.” The customer dispute is pending.
  • July 2021 — “Claimants allege that the registered representative recommended unsuitable investments.” The customer dispute is pending.
  • June 2021 — “CLIENT STATES THAT HE WAS MISLEAD AND WANTED A LOW-RISK PRODUCT. NOW THE REIT FILED FOR CHAPTER 11 BANKRUPTCY AND WOULD LIKE HELP GETTING HIS MONEY BACK.” The customer dispute was closed with no action.
  • June 2021 — “Claimant alleges that registered representative recommended unsuitable investments.” The customer dispute is pending.
  • May 2020 — “Respondent Zhang failed to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.” FINRA suspended Xiangyu Zhang from all capacities indefinitely, beginning May 28, 2020, until required payment is made or discharged.
  • September 2019 — “Clients allege violation of FINRA Rule 2111, Breach of Fiduciary Duty, Breach of Contract, Agency Liability, Elder Financial Abuse, and California Securities Law.” The customer dispute was settled for $445,000.
  • April 2019 — “Respondent Zhang failed to respond to FINRA request for information.” Xiangyu Zhang was barred by FINRA from all capacities indefinitely beginning August 2, 2019.
  • February 2019 — “Client alleges misrepresentation of investment products.” The customer dispute was denied.
  • December 2018 — “Wells Fargo Clearing Services, LLC (“WFCS”) registered person was terminated for violating company policy requiring that he maintain accurate books and records where he submitted altered documents for processing.” Xiangyu Zhang was discharged by Wells Fargo Clearing Services, LLC.
  • September 2018 — “Client alleges misrepresentation regarding REITs she purchased, additional allegations of forged initials.” The customer dispute was settled for $30,000.
  • September 2018 — “Client alleges misrepresentation regarding the REIT’s she purchased.” The customer dispute was settled for $4,479.01.
  • April 2010 — “ALLEGATIONS REGARDING UNSUITABLE RECOMMENDATION OF IPO OF A CLOSED-END MUNI-BOND FUND AND PLACEMENT BY RR OF UNAUTHORIZED LIMIT ORDERS WITH RESPECT TO THE SAME INVESTMENT.” Xiangyu Zhang voluntarily resigned from Merrill Lynch, Pierce, Fenner & Smith, Inc.

For a copy of Xiangyu Zhang’s FINRA BrokerCheck, click here.

We Help Investors Recover Investment Losses

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.

Attorney Matthew Wolper

Attorney Matthew WolperMatt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks. [Attorney Bio]