Investors Fight Brokers From Cetera, Wells Fargo Over Big Energy Losses

"With low interest rates, advisors been recommending [investments] with higher yields and have not been giving enough regard to the underlying securities," the attorney said. "These are highly concentrated positions for retirees, who cannot afford to lose the principal, and are generally inappropriate investments."

Cetera responded that "we are in the process of reviewing and responding to the legal action directed towards our firm.

"With respect to the action directed towards the independent contractor financial advisor named in this, we expect our affiliated financial advisors to adhere to the highest ethical and professional standards, and we are closely reviewing this matter to determine appropriate next steps. Beyond that, as a matter of policy, we do not publicly discuss such legal matters."

Wells Fargo declined to comment on the matter.

"Lot of brokers were selling these [energy] shares without their firm telling them to," said Soreide.

But in some cases, large firms – that were also making loans to energy companies – were recommending these investments through their advisors, "which seems like a conflict of interest," he adds.