Real Estate Investment Trusts (REITs)

Centaurus Financial Sanctioned and Fined by Regulators for Supervisory Failures for the Second Time in Three Months

Published on: May 10, 2023 | by Iorio Altamirano

In a recent regulatory case, on May 5, 2023, the Financial Industry Regulatory Authority (FINRA) Office of Hearing Officers imposed sanctions on Centaurus Financial, Inc. and its financial advisor Donnie Ingram for engaging in unsuitable and unethical practices, as well as supervisory failures. Centaurus Financial, Inc. was censured and ordered to pay a $50,000 fine and $388,962 in restitution to harmed customers. Donnie Ingram was suspended from association with any FINRA member firm in any capacity for six months, fined $15,000, and ordered to pay $388,962 in restitution to harmed customers. The sanctions were the result of Ingram’s unsuitable recommendations to customers to purchase Unit Investment Trusts (UITs), Bluerock Residential Growth REIT Inc. (BRG), and MacKenzie Realty Capital, Inc. (MAC) at higher costs when there were lower cost options available.

Earlier this year, in February 2023, Centaurus Financial also agreed to pay a $750,000 civil penalty after the SEC charged the firm in connection with the unsuitable recommendation of variable interest rate structured products to retail customers. The SEC’s order found that Centaurus failed to implement, and its branch manager failed to follow, Centaurus’ customer-specific suitability procedures and that Centaurus violated the broker-dealer books and records provisions of the federal securities laws. The SEC’s order found that Centaurus violated Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (“Securities Act”) and Section 17(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 17a-4(e)(5), 17a-4(f)(2), and 17a-3(a)(17)(i)(B)(3) thereunder. The SEC concluded that Centaurus failed reasonably to supervise the firm’s brokers.

Financial institutions like Centaurus Financial, Inc. must properly supervise financial advisors and customer accounts. Brokerage firms must establish and maintain a reasonably designed system to oversee account activity, such as recommendations to purchase alternative investments, such as GWG L Bonds, UITs, and REITS, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

Triad Advisors LLC Broker, Mark Just, Suspended by FINRA – Indianapolis, Indiana

Published on: May 25, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority (“FINRA”) has suspended Triad Advisors LLC broker Mark Just from the securities industry for three months for willfully failing to timely amend his Uniform Application for Securities Industry Registration or Transfer (Form U4) to disclose two state tax liens, which totaled $37,333.80. Mr. Just was also fined $5,000.

Mr. Just is also the subject of numerous customer complaints concerning allegedly unsuitable investment recommendations that he has made to customers involving alternative investments. According to his public disclosure report, those alternative investments include real estate securities (possibly REITs), business development companies (BDCs), direct participation programs (DPPs), Limited Partnerships (LPs).

If you have lost money with Mark William Just or Triad Advisors LLC, contact FINRA arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

Pinehurst, North Carolina Broker, Mercer Hicks III, Barred by FINRA for Making Unsuitable Recommendations to Five Senior Customers

Published on: May 24, 2021 | by Iorio Altamirano

Financial Industry Regulatory Authority (“FINRA”) Office of Hearing Officers has barred stockbroker Mercer (“Toby”) Hicks III from the securities industry for making unsuitable investment recommendations to five elderly customers ranging in age from 73 to 88 years old. The recommendations involved non-traded Real Estate Investment Trusts (“REITS”) and a Business Development Company, Business Development Company of America (“BDCA”). Mr. Hicks apparently targeted retirement communities in and around Southern Pines, North Carolina, for potential clients.

Mr. Hicks, a veteran broker of nearly 50 years, has been associated with Southeast Investments, N.C. Inc. since April 2014.

If you or a loved one were a customer of Mercer Hicks III, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation.

FINRA Files Enforcement Action Against Broker Adam Belardino, Formerly of MML Investors Services, LLC – Westchester County, New York

Published on: May 13, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority’s Department of Enforcement has filed a disciplinary proceeding complaint against former broker Adam Belardino. The complaint alleges that Mr. Belardino failed to cooperate with a FINRA investigation, which was initiated in Aril 2019 after Mr. Belardino’ s employment was terminated by MML Investors Services, LLC and disclosed (through a Form U5) that it discharged Mr. Belardino “in connection with [an] investigation into a customer complaint. The Form U5 (Uniform Termination Notice for Securities Industry Registration) also disclosed a complaint from customers alleging that beginning in November of 2018, Mr. Belardino “misrepresented [the customers’] account values, engaged in excessive levels of trading, and failed to comply with requests to have their accounts liquidated and the proceeds distributed. Additional customer complaints were subsequently disclosed, including a customer alleging that “the REITs that were sold to him [by Mr. Balardino] beginning in or around 2014 were unsuitable for his conservative portfolio.”

At the time of the alleged conduct, Mr. Balardino was associated with MML Investors Services, LLC (“MML Investor Services”) in Elmsford, New York. Prior to being a broker at MML Investor Services, Mr. Belardino was associated with MSI Financial Services, Inc. (“MSI Financial Services”), also in Elmsford, New York.

If you or a loved one were a customer of broker Adam Belardino, MML Investor Services, LLC, or MSI Financial Services, Inc., contact securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your legal rights.

St. Augustine, Florida Financial Advisor Charles Thomas Stevens, Formerly of D.H. Hill Securities, LLP, BARRED by FINRA

Published on: March 29, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority (“FINRA”) has barred stockbroker Charles Thomas Stevens from the securities industry for failing to appear and provide on-the-record testimony.

On December 1, 2020, FINRA’s Department of Enforcement filed a three-cause complaint against Mr. Stevens. The first cause of action charged that Mr. Stevens willfully failed to disclose a judgment and three tax liens on his Uniform Application for Securities Industry Registration or Transfer (Form U4). The second cause of action alleged that Mr. Stevens falsely represented to his firm that he did not have any unreported liens. The third cause of action alleged that Mr. Stevens failed twice to appear and testify at an on-the-record interview.

Mr. Stevens then failed to appear at two-pear hearing conferences scheduled by the hearing officer. FINRA’s Department of Enforcement then requested a default decision, which the hearing officer granted.

Lake Forest, Illinois Financial Advisor Victor A. Rigoni, III, Formerly of Summit Brokerage Services, Inc., Suspended by FINRA

Published on: March 29, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority (“FINRA”) has suspended stockbroker Victor A. Rigoni, III from the securities industry for three months. FINRA accepted an Offer of Settlement submitted by Mr. Rigoni after FINRA’s Department of Enforcement filed a disciplinary complaint against Mr. Rigoni in August 2020. The complaint alleged that from August 2012 through March 2019, Mr. Rigoni willfully failed to timely amend his Uniform Application for Securities Industry Registration or Transfer (Form U4) to disclose six unsatisfied federal and state tax liens totaling $164,521. On average, Mr. Rigoni disclosed his tax liens almost three-and-a-half years late. Mr. Rigoni also never disclosed a state tax lien of $11,304.

Mr. Rigoni has been associated with the following broker-dealers:

Cetera Advisor Networks LLC in Lake Forest, Illinois, from September 2019 to August 2020.

Broker Megurditch Mike Patatian, Formerly of Western International Securities, Inc. Facing Disciplinary Charges by FINRA for Recommending Unsuitable Illiquid REITs to 59 Customers, Including 21 Elderly Customers – Westlake Village, California

Published on: March 1, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority’s Department of Enforcement has filed a disciplinary proceeding complaint against broker Megurditch Patatian (aka Mike Patatian) alleging that, while associated with Western International Securities, Inc., Mr. Patatian engaged in conduct in violation of FINRA rules, including:

making 81 unsuitable recommendations to purchase over $7.8 million in non-traded Real Estate Investment Trusts (REITs) to 59 customers, including 21 senior investors;
recommending illiquid non-traded REIT to six customers that also needed liquidity;

Springfield, IL Financial Advisor Dustin P. Shafer BARRED by FINRA After Allegedly Borrowing Money from an Elderly Customer

Published on: January 8, 2021 | by Iorio Altamirano

**Update 4/14/2021** Iorio Altamirano LLP is currently investigating Newbridge Securities Corporation, Money Concepts Capital Corp, and Dustin Shafer for recommending that clients invest in private placement securities issued by GPB Capital. The GPB funds, which are private securities offerings exempt from registration with the Securities and Exchange Commission (SEC), are inherently risky investments. These investments are suitable only for highly sophisticated investors who understand the risks and can afford a significant monetary loss. Unfortunately, many brokerage firms and brokers sold the GPB Capital securities to retirees and unsophisticated investors because they paid a high up-front commission.

If you have suffered financial losses as a result of any of the following GPB private placement offerings, contact Iorio Altamirano LLP for a free and confidential review of your legal rights:

GPB Automotive Portfolio, LP

$3.9 Million Customer Claim Involving Former LPL Financial and Ameriprise Financial Broker Filed with FINRA – Boca Raton, FL

Published on: January 7, 2021 | by Iorio Altamirano

A recently filed FINRA customer complaint alleges that a former LPL Financial and Ameriprise Financial Services broker recommended unsuitable investments in a number of business development companies (BDCs) and real estate investment trusts (REITs), as well as other high-commission illiquid investment recommendations. The allegations focus on the broker’s time with LPL Financial from 2006 to 2015 and with Ameriprise Financial Services from 2015 to 2016. Claimants’ statement of claim, which was filed on or around September 9, 2020, seeks damages of $3.9 million.

Iorio Altamirano LLP is interested in speaking with any customers who may have suffered losses in their business development companies (BDCs) and real estate investment trusts (REITs) investments. If you have lost money with LPL Financial or Ameriprise Financial Services, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

Business Development Companies (BDCs)

Financial Advisor Cynthia Diane Cowden (CRD# 2054676) BARRED by FINRA for Recommending High- Risk Investments to Three Senior Customers – Lake Isabella, CA

Published on: October 23, 2020 | by Iorio Altamirano

**Update: 3/22/2021** Ms. Cowden has been the subject of two additional customer disputes since November 2020. First, in November 2020, a customer filed a securities arbitration complaint alleging $400,000 in damages concerning a real estate security recommendation. The causes of action included breach of fiduciary duty, unauthorized trading, and elder abuse. Second, in January 2021, a customer filed a written complaint with NPB Financial Group, LLC alleging $350,000 in damages related to an unsuitable investment recommendation. The customer has not yet filed a securities arbitration complaint. If you or a loved one were a customer of Diane Cowden, contact securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of the investment or retirement accounts.

Original Post:

Financial Advisor Cynthia Diane Cowden (CRD# 2054676) BARRED by FINRA for Recommending High- Risk Investments to Three Senior Customers – Lake Isabella, CA