Options Trading Strategy Attorneys

Texas Couple Sues Fidelity Over Options Strategy Investment Losses

Fidelity’s Advisory Referral Program Being Wrongfully Pushed on Fidelity’s Clients

Fidelity Brokerage Services, LLC (Fidelity) is facing claims related to its Wealth Advisor Solutions product (WAS) that Fidelity uses to recommend “third-party independent investment advisory firms.”  Essentially, this program allows Fidelity to make money from its customers by referring the customer to others for investment advice and management.  In particular, our investigation by our Options Trading Strategy Attorneys has uncovered that Fidelity is pushing this on its customers with “dormant” assets that are not paying any fees to Fidelity.

This is specifically prevalent for Fidelity customers with concentrated positions in one stock, or a small handful of stocks, that the customer has no interest in selling.  The basic premise is that if the customer does not want to sell the concentrated stock, the customer can nevertheless make income from the concentrated position by selling “covered” calls on the stock.  Fidelity then recommends a “third-party advisor” to implement this strategy.

There are a number of problems with Fidelity’s recommendation, including, that this strategy is really not a “covered” call strategy as most of Fidelity’s customers in this strategy have no desire to “cover” the call by giving up their underlying stock.  Instead, if the stock price goes up, the customer has to bring in other assets to cover the losses.  This makes the strategy more like a “naked” call strategy than a “covered” one, which is among the most aggressive investments that can be made.

If you have suffered losses in a high-risk trading strategy recommended by Fidelity brokers, contact Shepherd Smith Edwards and Kantas (investorlawyers.com) right away to request your free case assessment. Already, we are representing several investors over losses they sustained from using this call strategy that was allegedly misrepresented as a very conservative “covered call” writing strategy. These claimants are now suing Fidelity Brokerage Services for the unsuitable recommendation and misrepresentations.

Our Broker Misconduct Law Firm Is Representing Claimants in Their Six-Figure Lawsuit Against Fidelity for Recommending This Risky Strategy

Our firm is currently representing a Texas couple who had a long-held concentrated position that Fidelity recommended was suitable for this covered call strategy.  This broker fraud lawsuit contends that Fidelity and its financial advisor placed the firm’s own interests above the client’s best interests, a violation of SEC and FINRA rules. Also involved in this case was New Jersey-based registered investment advisory firm Advisors Capital Management (ACM), which worked with Fidelity on this matter.

ACM then brought in Chicago-based investment advisory firm SpiderRock Advisors (SpiderRock), which allegedly specialized in customized options strategies for customers.  The investors allege the risks were not fully disclosed or discussed with them, resulting in a lack of understanding of the strategy or the risks with it.

Although investment strategies are known for losing money at times, the case filed with FINRA argues that this particular options strategy being recommended and implemented was unsuitable for these two claimants given their portfolio.  Moreover, the case alleges this was recommended to the customers as a purported way for Fidelity to profit from customer assets that were not otherwise generating returns for Fidelity.

In this case, that included the broker-dealer earning over $14,000 in fees as well as commissions on the trades even though the strategy was only used for a few weeks. In their FINRA lawsuit, these Texas investors are also alleging breach of contract, breach of fiduciary duty, negligence, gross negligence, and other wrongdoing.

Fidelity Being Sued in Texas Court by Own Broker Over Wealth Advisor Solutions Push

Recently, former Fidelity broker Michael Maeker filed a whistleblower lawsuit against Fidelity in Texas Federal Court claiming he was wrongfully terminated as retaliation for reporting that its sales tactics in pushing WAS disregarded investors’ best interests.

Maeker contends that from 2019 to 2023, Fidelity made career threats to brokers unless they moved clients into high-revenue generating investments. Fidelity also purportedly offered compensation incentives to the financial advisors who complied.

Why Hire Our Seasoned Options Trading Strategy Attorneys?

Shepherd Smith Edwards and Kantas Options Trading Strategy Attorneys have decades of experience fighting for investors. This includes representing clients who suffered losses in virtually every type of options trading strategy, from naked call options strategies to covered call writing strategies to yield enhancement strategies and more.

We are also investigating other claims of losses by investors to whom Fidelity sold Tier 3 financial investment products, which tend to generate the highest revenues and profits for the firm. This category includes alternative investments, equities, managed money, and options strategies.

With more than a century’s worth of combined experience in securities law and the securities industry, our investment loss recovery lawyers have been able to collectively recover many millions of dollars for thousands of investors. We have gone up against the largest Wall Street firms to secure awards and settlements for clients.

How To Contact Our Options Trading Strategy Attorneys:

Call (800) 259-9010 or fill out this form.