Category Archives: Business Development Company (BDC)

VSR Financial Services Ordered to Pay Couple $307,000 For Recommendation of Alternative Investments

February 17, 2016

A FINRA (FInancial Industry Regulatory Authority) arbitration panel recently ordered VSR Financial Services to pay  a Louisiana couple  over $300,000 in damages for losses on non-traded real estate investment trusts (REITs), promissory note programs, limited partnerships and private oil drilling programs. FINRA Case # 15-00834.

Some of the specific investments at issue in this case were:

  • MPF Senior Note Program
  • Atlas America Series #25-2004B
  • AmREIT Monthly Income & Growth II
  • Cole Credit Property Trust
  • ArciTerra Note Fund II

The claimants alleged that VSR Financial and broker Michael Shaw, committed fraud, breached their fiduciary duty, were negligent, misrepresented the investments and other claims.

In May 2013, VSR Financial was sanctioned by FINRA in connection with the sale of alternative investments. See this for more details on that regulatory matter. 

If you have losses in your account at VSR Financial Services, contact us for more information.

For more information on VSR Financial and its brokers in the Plano, Texas area and elsewhere, see this. 

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Purshe Kaplan Sterling Investments and Broker Vungarala Named In Regulatory Complaint

February 4, 2016- Boca Raton, Florida

The Financial Industry Regulatory Authority (FINRA) filed a disciplinary proceeding against brokerage firm Purshe Kaplan Sterling Investments and broker Gopi Krishna Vungarala alleging that from June 2011-January 2015 Vungarala regularly lied to his customer, a Native American tribe, about the investments he was recommending to them.

According to the complaint Vungarala convinced the tribe to invest hundreds of millions of dollars in non-traded real estate investment trusts (REITs) and business development companies (BDCs)  , also known as alternative investments, generating over $11 million dollars in commissions.

The complaint seeks disgorgement and other relief. FINRA Disciplinary Proceeding 2014042291901.

 

According to FINRA records Vungarala has been registered with Purshe Kaplan Sterling Investments since 12/2007.

Purshe Kaplan Sterling Investments has been a FINRA member since 1994. They have about 1,250 registered persons in 460 branch offices.

Alternative investments include non publicly traded real estate investment trusts (REITS) , hedge funds, real estate, commodities and derivatives contracts and, managed futures. It may also include art, wine, antiques, coins or stamps. These investments tend to be complex, illiquid, nontransparent, hard to value and expensive. Many of the alternative investments sold over recent years are not traded on any public market making them difficult to value and even more difficult to liquidate if cash is needed.

If you have losses in an account handled by  Purshe Kaplan Sterling Investments , contact us to discuss how you may be able to recover damages for those losses.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

National Planning Corp. Fined by Regulators for Excessive Sales Charges

August 25, 2015- El Segundo, California

National Planning Corporation , entered into a Letter of Acceptance Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that from April 2009 to April 2014 they failed to apply volume discounts to certain customers’ purchases of non-traded real estate investment trusts (REITs) and business development companies (BDCs).

As a result those affected customers paid excessive sales charges.

AWC No. 2014042567801

National Planning Corporation was censured , fined $30,000 and ordered to pay restitution of over $16,000.

National Planning Corporation has been a FINRA member since 1992, and  has  about 1800 brokers in 900  branch offices .

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

J.P. Turner Sanctioned For Excessive Sales Charges

August 25, 2015- Atlanta, Georgia

J.P. Turner & Company , entered into a Letter of Acceptance Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that from April 2009 to April 2014 they failed to apply volume discounts to certain customers’ purchases of non-traded real estate investment trusts (REITs) and business development companies (BDCs).

As a result those affected customers paid excessive sales charges.

AWC No. 2014042566601

J.P. Turner & Company was censured , fined $45,000 and ordered to pay restitution of over $21,000.

J.P. Turner & Company has been a FINRA member since 1997, and  has  about 360 brokers in 150  branch offices .

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Miami Based Investacorp Sanctioned For Excessive Sales Charges on REIT Sales

July 15, 2015- Miami, Florida

Investacorp Inc. , entered into a Letter of Acceptance Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that from April 2009 to April 2014 they failed to apply volume discounts to certain customers’ purchases of non-traded real estate investment trusts (REITs) and business development companies (BDCs).

As a result those affected customers paid excessive sales charges.

AWC No.2014042565701

Investacorp Inc. was censured , fined $50,000 and ordered to pay restitution of over $27,000.

Investacorp  has about 514 brokers in 331  branch offices and is headquartered in Miami, Florida.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Transamerica Financial Advisors Sanctioned by Securities Regulators

July 24, 2015- St. Petersburg, Florida

Transamerica Financial Advisors (Transamerica)   entered into a Letter of Acceptance Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that from January 2012 to February 2014 the firm failed to apply volume discounts to certain customer’s purchases of non-traded real estate investment trusts (REITs) and business development companies (BDCs) in violation of FINRA Rule 2010 and failed to have in place an effective supervisory system designed to ensure compliance.

AWC NO. 2014042291801

Transamerica was censured, fined $85,000 and ordered to pay restitution of $51,066 to affected customers.  

Transamerica   has been a FINRA member since 1985, is headquartered in St. Petersburg, Florida , and has nearly 5,000 registered representatives in 1,100 branch offices nationwide.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

LPL Financial Fined–Again–Over Alternative Investments

By Robert H. Rex, Esq. 

In March 2014, the Financial Industry Regulatory Authority (FINRA) fined LPL Financial $950,000 for supervisory deficiencies in connection with the sales of various alternative investments including: 
 
  • Non Traded Real Estate Investment Trusts (REITs)
  • Oil & Gas Partnerships
  • Business Development Companies (BDCs)
  • Hedge Funds
  • Managed Futures
Most alternative investments specify the appropriate concentration limit for investors in the documentation provided to investors in the offering. Brokers are charged with making “suitable recommendations” to investors given their age, health and level of financial sophistication. In addition, many states have their own specified concentration levels for these investments. 
 
What is a concentration level? It generally relates to the percentage of an investor’s liquid net worth (stocks, bonds, cash, etc…) that is invested in alternative investments. For example, if an investor has total liquid net worth of $750,000 and is sold alternative investments worth $50,000, the concentration level is 50,000/750,000, which is 6.7%. In most cases, after taking into consideration the age, health, etc of the investor, that may be an acceptable level of concentration. If however the amount of alternative investments was $150,000, 20% of liquid net worth, that could be a problem. 
 
Alternative investments generally pay significantly higher commissions, to the broker and the brokerage firm, making them a tempting target for brokers to sell to often times very unsophisticated investors. 
 
In  this recent FINRA investigation, which LPL neither admitted or denied charges, FINRA found that from Jan 1, 2008- July 1,  2012, LPL Financial failed to adequately supervise its brokers selling alternative investments in violation of concentration limits. 
 
LPL Financial’s has had many similar issues  with securities regulators over its supervisory and compliance deficiencies. In December 2012,  LPL paid $4.8 million in restitution to settle sales practice claims with William Galvin,  Secretary of Commonwealth, Massachusetts Securities Division, over sales practices. 
 
In March 2013, FINRA fined LPL Financial $7.5 million for failures related to their email system. 
 

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870