Freddy Berens (CRD#: 18877), a registered representative with Wells Fargo Clearing Services LLC (CRD#: 19616) in Miami, Florida, is currently embroiled in a pending customer dispute over Puerto Rican bonds in which a client is seeking $1.5 million in damages, according to his BrokerCheck record accessed on April 27, 2020.
How did this dispute come about? On March 27, 2020, a client alleged that Freddy Berens recommended unsuitable investments in Puerto Rican bonds from 2010 through 2016. The client is seeking $1.5 million in damages; the dispute is pending.
What should investors know about Puerto Rican bonds? Bonds issued by the government of Puerto Rico have historically been attractive to investors because the bonds carry a so-called “triple tax exemption.” What is the “triple tax exemption”? Puerto Rican bonds are exempt from federal, state, and local taxes. Furthermore, the triple tax exemption applies no matter where the bondholder resides. In recent years, however, Puerto Rican bonds have been less attractive to investors. What happened? In 2014, several Puerto Rican bonds were downgraded to “junk bond” status after it became clear that the government of Puerto Rico would be unable to pay their obligations. Since 2014, Puerto Rico has faced a financial crisis and the recent devastation of Hurricane Maria has only made things worse in Puerto Rico.
Freddy Berens’s dispute over Puerto Rican bonds is far from the only disclosure listed on his BrokerCheck record. Freddy Beren has also been the subject of several other complaints.
On July 31, 2009, a claimant filed a complaint against Freddy Berens, alleging that he violated Florida securities laws, committed common law fraud, breached his fiduciary duty, acted negligently, and breached his contract. According to BrokerCheck, the claimant was Freddy Beren’s ex-wife, who alleges her ex-husband “induced her to release him from alimony payments in 2004 by having her sign an amendment to [a] property settlement agreement.” She further alleges that the agreement paid out a lump sum of $1.5 million instead of $5.4 million in permanent monthly alimony payments. She also alleged that Freddy Berens invested the $1.5 million in unsuitable investments, causing her further damage. According to BrokerCheck, the client sought $7 million in compensatory damages, plus $21 million in interest, costs, fees, and punitive damages. The matter ultimately settled for $225,000.
Five years later, on February 12, 2014, a co-trustee of a client’s account alleged that the only bonds that the client instructed Freddy Berens to purchase were those that could be put at par at death. Instead, according to Freddy Berens’s BrokerCheck report, the broker recommended federal farm credit bank bonds in excess of the death put limit. The co-trustee asked to be made whole at par value. The matter ultimately settled for $275,000.
Earlier in his career, Freddy Berens also found himself embroiled in multiple disputes and regulatory sanctions. He was the subject of two regulatory actions (from the New York Stock Exchange and the Securities and Exchange Commission). He also lost two arbitrations and settled another dispute for $800,000.
Freddy Berens is a 54-year veteran of the securities industry. Over the course of his career, he has worked at five brokerage firms. In addition to his current role with Wells Fargo Clearing Services LLC (CRD#: 19616) in Miami, Florida, he has also worked for the following firms:
- Prudential Securities Incorporated (CRD#: 7471)
- Bache Halsey Stuart, Inc. (CRD#: 7238)
- Bache & Co. Incorporated (CRD#: 7058)
- Bache & Co. Incorporated (CRD#: 66)
Freddy Berens has passed the Series 65 – Uniform Investment Adviser Law Examination, the Series 63 – Uniform Securities Agent State Law Examination, the SIE – Securities Industry Essentials Examination, the PC – AMEX Put and Call Exam, and the Series 1 – Registered Representative Examination. Freddy Berens is licensed to sell securities in Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Idaho, Kentucky, Maryland, Massachusetts, Montana, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Puerto Rico, South Carolina, South Dakota, Texas, the Virgin Islands, and Washington.
If Freddy Berens was your broker and you have questions about your investments, especially if they were in Puerto Rican bonds, don’t hesitate to contact the securities attorneys of Fitapelli Kurta to learn about your options for recovery. Call (877) 238-4175 or email email@example.com for your free case consultation with a securities attorney.