NEW YORK, NY – Wells Fargo Bank is facing renewed criticism after it’s been revealed that some of their investment practices going back almost 30 years have left many of its customers with far less money than they originally invested.
When Charles LePonte decided to invest the proceeds from the sale of a family business toward his retirement in 1995, he turned to Wells Fargo to help create a diversified investment portfolio. Now, 25 years later and ready to retire, he’s learned that his investment is essentially worthless.
“I put the money away and really didn’t think about it much,” LePonte told BeetPress, continuing “I got a bit nervous after the Great Recession but the bank told me my investments were secure, that they’d rebound, and I thought that I had grown a sizable nest egg for myself.”
Upon a closer inspection of his portfolio documentation, LePonte discovered that Wells Fargo had invested 40% of his assets into Beanie Babies, 35% into Tickle Me Elmo dolls, and 25% into Madoff Securities.
At the time, Beanie Babies were selling for up to ten times their value or more in the collector market, mostly though auctions sites such as ebay.com. Those hoping to capitalize on the Beanie Baby frenzy, including Wells Fargo, purchased large amounts of the toy with the intention of flipping them for huge profits in the collector market, but as supply increased the resale price of the plush toys went down with only a few rare examples maintaining any substantial value.
What started as a $100,000 investment now sits in a storage facility on Long Island: 8,000 Beanie Babies, 1200 Tickle Me Elmos, and 300 ZhuZhu Pets purchased using a $4,000 payout from the Madoff Victim’s Fund.
“I’m angry. I thought I was sitting on a quarter million [dollars]. I did a bit of research and discovered that, even if I pieced out each toy for resale, I’d only be able to net maybe $10,000, and that’s even if I manage to sell the damn things,” said LePonte.
A representative from Wells Fargo told BeetPress by phone that “Mr. LePonte signed paperwork clearly stating that his funds were subject to investment risks, including possible loss of the principal amount invested and that investment products are not insured by the FDIC or any federal government agency,” adding “so he’s shit out of luck.”
LePonte hopes that his experience will serve as a cautionary tale to other investors, saying “make sure you read the fine print. If you’re investing in fine wines, vintage automobiles, Yahoo!, or timeshares, it’s crucial you know what you’re getting yourself into. Do your research, I wish I had.”