Update on John H. Towers Investigation-VSR Financial

Rex Securities Law has been investigating VSR Financial broker John H. Towers on behalf of several of his customers whose account suffered losses in private placements, REITs and other alternative investments.

UPDATE APRIL 2014- ANOTHER FINRA ARBITRATION FILED AGAINST VSR- Rex Securities Law filed another  FINRA arbitration against VSR to recover damages in excess of $475,000 on behalf of two St. Petersburg, FL residents who allege that VSR broker John Towers sold them unsuitable non-conventional investments including the following:

  • ArciTerra REIT
  • Bradford Drilling Assoc 23
  • Cypress Equipment Fund 13
  • Cypress Income Fund III 8.25% Note
  • Florida Capital Real Estate Partners 27, Ltd.
  • Mewbourne Energy Partners 07-A LP
  • NetREIT Common
  • Odyssey Operating Partnership II
  • Odyssey Properties III Inc.
  • United Development Funding III
  • Waveland Drilling Partners 2007-A LP
  • Waveland Vanguard Partners LLC
  • Waveland Vestara-Class B

UPDATE FEBRUARY 2014-FINRA ARBITRATION FILED AGAINST VSR-Rex Securities Law files FINRA arbitration against VSR to recover damages in excess of $600,000 for two Dallas, TX area residents who allege that VSR broker John Towers sold them unsuitable alternative investments.

The investments made in the customer accounts included various gold funds (First Eagle Gold Fund, Invesco Gold & Precious Metals, Van Eck International Investors Gold) and :

  • Alliance Petroleum Corp. 2006B
  • Arciterra Strategic Retail Echelon
  • Arciterra Whitefish Opportunity Fund
  • Atlas  America Public #17
  • Bradford Drilling Assoc 27
  • Cypress Equipment Fund 13
  • Florida Capital Real Estate Partners 27
  • NetREIT Common
  • Mewbourne Energy Partners 9, 10, 11, 12
  • Odyssey Properties III
  • Odyssey Residential Realty II, 9% Note
  • Reef SWD 2007-A
  • Ridgewood Energy Funds
  • Waveland Drilling 2006-B
  • Waveland Drilling 2007-A
  • Waveland Drilling 2008-B
  • Waveland Resource Partners
  • Waveland Vanguard Partners

On December 18, 2013, without admitting or denying the findings, Towers entered into an Acceptance, Waiver and Consent (AWC) with FINRA which provides for a three month suspension starting January 21, 2014, and ending April 20, 2014, and a civil and administrative penalty of $25,000.

In its investigation, FINRA alleged that Towers recommended that a married couple invest in high risk private placements and real estate investment trusts (REITS) totalling over $6 million dollars and representing over 70% of their invested capital. According to FINRA allegation, the private placements and REITs recommended by Towers were all described in the offering documents as high risk investments. The couple had stated a moderate risk tolerance on their new account forms and specified that no more than 10% of their account be invested in high risk products. Towers provided false and inaccurate values of the investments that had no correlation to prices published by his firm and despite knowing that the investments had declined in value listed the couple’s original cost basis rather than the actual current value specified by the firm.

According to FINRA records, Towers has been registered with VSR Financial Services, Inc. since June 2002, and operates Personal Wealth Advisors, LLC in Plano, Texas, and John H. Towers & Associates in Tyler Texas.

Real estate investment trusts, especially those not traded on a conventional exchange, as well as other alternative investments such as oil and gas and other limited partnerships and private placements are generally not considered suitable for persons not wanting to accept high risk.

If you have information which you feel may be of assistance to our investigation , we would appreciate hearing from you. If you have suffered losses in an account handled by John Towers you may be able to recover all or a part of those losses through FINRA arbitration.

Rex Securities Law provides nationwide representation to investors seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.  Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Rex Securities Law

561 391 1900