In 1979, Joe Dietch launched a small broker/dealer business, the Cambridge Group. In 1984, he changed the name to Commonwealth Financial Network (“Commonwealth”). Today, Commonwealth is the largest privately held independent registered investment advisor-broker/dealer in the country. The firm has licenses in all 50 states as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
Financial Misconduct at Commonwealth Financial Network
Commonwealth is licensed by the Financial Industry Regulatory Authority (FINRA), and as such is legally obligated to ensure its brokers are acting lawfully in the interest of their investors. If a client suffers losses as a result of negligent behavior or misconduct from a broker, then the firm may be held legally responsible to repay the damages.
Commonwealth and brokers backed by Commonwealth have a long history of misconduct and complaints with 45 disclosures (26 regulatory; 1 civil; 17 arbitrations; and 1 bond) listed on FINRA’s BrokerCheck Report.
In May 2013, the Massachusetts Securities Division initiated a case against Commonwealth, accusing the firm and its representatives of selling non-traded Real Estate Investment Trusts (REITs) to investors at levels that exceed the maximum concentration limit in the state. Since non-traded REITs are considered very risky, it’s important that individuals who invest in this product are properly diversified. As a result of the case, Commonwealth was fined $300,000 and ordered to pay full restitution.
In October 2015, FINRA investigated Commonwealth and found the firm to be systematically overcharging customers. Clients who purchased specific types of Unit Investment Trusts (UITs) were denied transaction fee discounts that should have been available to them. FINRA found that Commonwealth was negligent in relying upon its representatives to ensure that clients were given the right discounts – especially because the firm failed to provide sufficient training. As a result, Commonwealth was fined $225,000 and ordered to pay $357,521.04 in restitution.
In November 2018, FINRA once again ruled that Commonwealth overcharged investors $766,295 by allegedly putting them into costlier share classes than the ones that they were eligible for. From 2010 to 2017, the firm failed to offer class A share funds without front-end sales charges. As a result, Commonwealth paid $888,337 in restitution to its clients.
In September 2021, Commonwealth was ordered to pay $20,000 after the State of Connecticut, Department of Banking, Securities and Business Investments Division brought a claim alleging that the firm violated state agency regulations, specifically the Connecticut Uniform Securities Act, by failing to establish, enforce, and maintain a system for supervising the activities of its agents that was reasonably designed to achieve compliance with applicable securities laws and regulations.
Most recently, in November 2022, the Massachusetts Securities Division brought a regulatory action against Commonwealth alleging that the firm failed to properly register its investment adviser representative who has a place of business in Massachusetts before the adviser began providing advisory services. Commonwealth agreed to pay a fine of $20,000.
You May Have a Claim. Contact Our Firm Now!
As an investor, you have a right to recover investments lost through unethical behavior or decisions made against your interests. Meyer Wilson reclaimed $350 million for the victims of investment fraud or misconduct. Our attorneys are experienced in going up against large investment firms, and our track record affirms our resources and expertise. Meyer Wilson has represented clients nationwide and internationally, in state and federal courts, and in arbitration through FINRA and the American Arbitration Association (AAA).
If you believe that you have been the victim of investment fraud or may have been recommended unsuitable investments, you have options. Call Meyer Wilson today!