Investigation: Michael Sharenow’s Sale of Puerto Rico Bonds

Sonn Law Group is investigating claims related to the sale of Puerto Rico bonds by Michael Jay Sharenow (CRD#1195028). Sharenow is currently associated with Wells Fargo Advisors, LLC in Florham Park, New Jersey. Prior to joining Wells Fargo, Sharenow was associated with RBC Capital Markets Corporation (“RBC”) in Parsippany, New Jersey from October 2009 through June 2010.

Related: COFINA Bonds Default

Closed Complaints

Sharenow has two resolved customer complaints, including:

  1. A claim with unspecified damages based on allegations of unauthorized trading and inaccurate information about unit investment trusts on various occasions received by FINRA on November 5, 2013 and denied as of June 10, 2014; and
  2. A claim with alleged damages of $23,078 based on allegations of impersonation of client’s late husband in order to withdraw money out of her account received by FINRA on January 26, 2006 and denied on the same date.

As of May 25, 2016, he has no pending complaints.

Puerto Rico Bonds

Many investors in Puerto Rico bonds and closed-end mutual funds that invest heavily in Puerto Rico government bonds have suffered substantial losses. The closed-end mutual funds employed leverage, or borrowed funding, which magnified investor risk and loss. In August and September 2013, the value of Puerto Rico bonds and certain closed-end mutual funds declined dramatically, and by February 2014, the ratings agencies had downgraded Puerto Rico’s debt to “junk” status or speculative (below investment grade).

Broker and Firm Responsibilities

The Financial Industry Regulatory Authority (“FINRA”) holds brokerage firms to high standards. A brokerage firm must have a reasonable basis to believe that a transaction is the right fit for you based on their awareness and understanding of your investment profile. The brokerage firm must consider information about you and your investment profile including such things as your age, other investments you own, investment objectives, investment experience, risk tolerance, investment time horizon, liquidity needs, and so on. Recommendations must be suitable. Your broker can be held liable for making unsuitable investment recommendations. FINRA member firms are also barred from presenting misleading information to get you to buy or sell an investment.

Further, FINRA member firms are responsible for the supervision of a broker’s activities while the broker is registered with their firm. Therefore, Wells Fargo Advisors, LLC and/or RBC Capital Markets Corporation may be liable for investment or other losses suffered by Sharenow’s customers.

If you invested in Puerto Rico debt, were a client of Wells Fargo Advisors, LLC, RBC Capital Markets Corporation, or Michael Sharenow and have experienced investment losses or irregularities in your investment accounts, please call Sonn Law Group at 844-689-5754 or click here to access our contact form. Sonn Law Group is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies.