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Richard Wesselt, Broker Formerly With O.N. Equity Sales Company, Subject Of 16 Disclosures

Richard Wesselt (a/k/a Rich Wesselt, Richard M Wesselt, CRD#: 2195569), a currently-registered broker with Fortune Financial Services, Inc. (CRD#: 42150) in Collegeville, Pennsylvania, is the subject of 16 disclosures on his publicly-available FINRA BrokerCheck report.  Wesselt has been a broker since 1992 and previously worked for The O.N. Equity Sales Company (CRD#: 2936), Stern Agee Financial Services, INC. (CRD#: 18456), American Investment Services, Inc. (CRD#: 21111 expelled), W.S. Griffith & Co., Inc. (CRD# 10410), and PML Securities Company (CRD#: 4082).Richard Wesselt (a/k/a Rich Wesselt, Richard M Wesselt, CRD#: 2195569), a currently-registered broker with Fortune Financial Services, Inc. (CRD#: 42150) in Collegeville, Pennsylvania, is the subject of 16 disclosures on his publicly-available FINRA BrokerCheck report.

Wesselt has been a broker since 1992 and previously worked for The O.N. Equity Sales Company (CRD#: 2936), Stern Agee Financial Services, INC. (CRD#: 18456), American Investment Services, Inc. (CRD#: 21111 expelled), W.S. Griffith & Co., Inc. (CRD# 10410), and PML Securities Company (CRD#: 4082).

Customer Disputes Against Richard Wesselt

All but one of the 16 disclosures on Wesselt’s CRD are customer disputes. Details about their allegations and settlement/damages requested are below:

  • December, 2019 – Clients allege Wesselt recommended high-commission products including annuities and life insurance that were not suitable. $100,000 damages requested, pending.
  • November, 2019 – Unsuitable transactions regarding sale of life insurance. Settled for $112,725. Wesselt denied any wrongdoing.
  • November, 2019 – Customer alleged that the sale of whole life insurance policies was unsuitable. $20,000 damages requested, pending.
  • June, 2019 – Unsuitable investment recommendations, investment strategy, and misrepresentations and omissions. $10,000,000 damages requested, pending.
  • June, 2019 – Unsuitable investment recommendations, breach of customer protection rules. $900,000 damages requested, pending.
  • April, 2019 – Customer alleges Wesselt recommended they took loans against policies and withdraw funds from annuities, 529 savings account, and IRA to purchase whole life insurance products. Settled for $207,500.
  • April, 2019 – Unsuitable investment recommendations, deceptive and unfair trade practices. $300,000 damages requested.
  • March, 2019 – Unsuitable investment recommendations and investment strategy. $350,000 damages requested, pending.
  • February, 2019 – Unsuitable investment recommendations, investment strategy, and misrepresentations and omissions. Settled for $100,000.
  • December, 2018 – Unsuitable sales of insurance and annuities. $750,000 damages requested, pending.
  • July, 2018 – Unsuitable investment recommendations and misrepresentation. $400,000 damages requested, pending.
  • August, 2017 – Sale of variable annuity allegedly not suitable. Settled for $25,674.
  • March, 2017 – Negligent sale of unsuitable products in violation of fiduciary duty. Settled for $15,000.
  • August, 2016 – Sale of variable annuity and life insurance alleged to be unsuitable. Settled for $24,257.
  • March, 2008 – Unsuitable recommendations and misrepresentations regarding variable annuity. $45,576 damages requested, denied.

The first disclosure on Wesselt’s CRD is an employment separation from W.S. Griffith & Co., Inc. in 1997 regarding an allegation that he placed a customer’s signature on a document.

Unsuitable Investments

Every one of the customer disputes against Wesselt includes an allegation of unsuitable investments. It is a broker’s responsibility to understand their client’s financial goals and the kind of investments they are comfortable with. Based on their understanding of their customers, they are supposed to recommend suitable investments.

Recommending unsuitable investments is a violation of FINRA (Financial Industry Regulatory Authority) rules 2090 and 2111.

FINRA Rule 2090 is also known as the “know your customer” rule. A broker is obligated to find out information about their client so they can meet their needs and comply with regulations.

FINRA Rule 2111 mandates that a firm or an advisor have a reasonable basis to believe that a recommendation is suitable to their client based on information such as their age, employment status, objectives, and risk tolerance.

Brokers also must know details about the investment they are recommending in order to determine if it is suitable for their client.

Brokers and financial advisors have been known to recommend unsuitable investments because they pay a higher commission than more suitable investments.

What’s suitable for an investor changes over time. Suitable investments for someone in their 30s may not be suitable for someone who is retired or close to retirement age. Older investors typically need less risky, liquid investments since they will need to withdraw money to support themselves in retirement. A broker who recommends high-risk investments to a retired person is violating the suitability rule.

Variable Annuities

Several of the customer disputes against Wesselt involve variable annuities. A variable annuity is a contract between an investor and an insurance company. The insurance company agrees to pay the investor or periodic payments at a certain point in the future. The investor’s money can be put into a variety of investments, often mutual funds.

Variable annuities are popular products among brokers and financial advisors because they receive high fees for selling them. The high fees and surrender charges paid by investors make variable annuities quasi-illiquid. Lower fee alternatives to variable annuities are often a better option for investors.

Variable annuity fraud occurs when the broker selling agent misrepresents or fails to disclose information about the annuity.

Variable annuity switching is when a broker recommends that a client switch their current annuity for another in order to generate a commission for themselves. The broker may sell the idea of switching by touting the benefits of the new annuity to the investor, while downplaying the downsides such as the surrender fee.

Scott Silver, managing partner of Silver Law Group, recently gave a presentation on variable annuity fraud and how FINRA arbitration cases can be won to recover losses from unsuitable annuity and life insurance recommendations.

Did You Have Investment Losses With Richard Wesselt?

Silver Law Group has extensive experience representing investors whose financial advisor has recommended unsuitable investments, including variable annuities.

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today and let us know how we can help.

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