Andrew Matthew Polis, of Philadelphia, Pennsylvania, a stockbroker associated with Wells Fargo Advisors, was the subject of a customer initiated investment related complaint filed on July 18, 2023, in which the customer requested compensatory damages based upon allegations that Polis placed the customer in CDs that had a longer term than the customer asked for during the time that Polis was associated with Wells Fargo Advisors. The complaint was denied.
Long terms CDs are not like traditional CDs. Long terms CDs trade in the market place, and unless an investor is willing to hold these securities until maturity, Long terms CDs are subject to considerable market risk. However, since Long terms CDs are sold as bonds, generally, the broker can obtain a commission or mark-up from the sale.
Since 2002, FINRA has consistently reminded its members as to the risks associated with the sale of Long Term Certificates of Deposit and Structured or Principal Protected Notes. See, e.g. Notice to Members 02-28 (May 2002 )(“Member Obligations Regarding Long-Term Or Brokered Certificates Of Deposit”); Regulatory Notice 09-73 (December 2009)(“FINRA Reminds Firms of Their Sales Practice Obligations Relating to Principal-Protected Notes”).
With respect to Long Term Certificates of Deposit, FINRA has stated:
Members must disclose to prospective purchasers all material risks associated with long-term CD products and should distinguish those risks from those that apply to traditional CDs.
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Long Term Certificates of Deposit generally are inappropriate products for customers who have a short-term investment horizon or who may need the principal before maturity. In any event, it is essential that customers be informed of the face maturity date of any CD.
Notice to Members 02-28 at 231.
This is not the first time that Polis has been referenced in a customer initiated investment related dispute concerning Polis’s conduct in the securities industry. Financial Industry Regulatory Authority (FINRA) Public Disclosure shows that Polis was also referenced in a customer initiated investment related complaint filed on January 2, 2002, in which the customer requested compensatory damages based upon allegations that Polis engaged in unsuitable trading in AOL and Intel and caused the customer’s account to be overconcentrated in certain securities when Polis was associated with Prudential Securities Incorporated. The customer withdrew this complaint.
On March 15, 2023, a customer initiated investment related complaint involving Polis’s conduct was settled for $60,486.72 in damages based upon allegations that Polis invested the customer in CDs with terms longer than the customer had requested during the time that Polis was associated with Wells Fargo Advisors.
Polis has been associated with Wells Fargo Clearing Services in Philadelphia, Pennsylvania since July 1, 2003, as a stockbroker, and since August 28, 2007, as an investment adviser representative.
