David Lerner: Spirit of America Energy Fund (SOAEX)

Spirit of America Energy Fund (SOAEX): How to Recover Investment Losses From David Lerner Associates, Inc.

Several customers have filed securities arbitration claims against David Lerner Associates Inc. (“David Lerner Associates”) related to brokers’ recommendations to purchase the Spirit of America Energy Fund. The energy mutual fund invests 80% of its assets in energy and energy-related companies. Class A shares of Spirit of America Energy Fund (NASDAQ: SOAEX) have declined from over $91 per share in August 2014 to around $14 per share in early March 2021. Class C shares of Spirit of America Energy Fund (NASDAQ: SACEX) have declined from over $47 per share in January 2017 to around $13 per share in early March 2021.

Based on public records, Iorio Altamirano LLP believes that the following brokers at David Lerner Associates may have recommended SOAEX to clients:

NameCRD No.Branch Office
Richard Marc Lerner5163045Syosset, New York
Martin Lerner871038Boca Raton, Florida
Gary W Isler1514385Lawrenceville, New Jersey
David Oser1537076White Plains, New York
Alan Lowenfels4512765White Plains, New York
William Campbell11880015White Plains, New York
Francisco Cabral5257195White Plains, New York
Daniel T. Lerner1255769White Plains, New York
Rafael Klein2865823Westport, Connecticut
Glen Howard Werner6118112Syosset, New York
Michael Joseph Norton2617985Syosset, New York

If a broker at David Lerner Associates recommended the Spirit of America Energy Fund to you and you have suffered investment losses, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

The Spirit of America Energy Fund

The Spirit of America Energy Fund primarily invests in energy-related entities such as exploration companies, production companies, transmission companies, and Master Limited Partnerships (MLPs). The fund’s investment objective is to provide investors long-term capital appreciation and current income. The energy fund is not likely suitable for customers with conservative risk tolerances, short-time horizons, or liquidity needs.

In addition to the energy fund’s poor performance, investors also paid high fees. Class A shareholders may have paid up to 5.75% of the offering price in sales charges on purchases and an additional 1% deferred sales charge if the shares were redeemed within 12 months of the purchase. Class A shareholders were also subject to additional annual fees related to operating expenses, including a management fee (.95%) and distribution and/or service (12b-1) fees (.25%).

As the following example shows, as is often the case, the brokers did pretty well by recommending this high fee mutual fund while the customers were left with large losses.

Hypothetical Example:

  • A customer invested $300,000 into Class A shares of the fund in March 2015 when the shares traded at $71 / share.
  • The brokerage firm, David Lerner Associates, for example, would receive a maximum front load fee of $17,250 (5.75% of $300,000).
  • The customer’s original investment would be worth approximately $55,700 today, assuming a share value of $14, excluding other fees, such as the management fee.
  • In this example, the firm that recommended the fund would have made over $17,000 in sale charges. At the same time, the investor suffered losses of $244,300.

The investor might be able to recover financial losses if the broker’s recommendation to purchase or hold the fund was not in the customer’s best interest.

The customer may also be able to recover losses if the broker or firm misrepresented or omitted material facts about the fund in connection with making the buy or hold recommendation.

David Lerner has also received numerous customer complaints related to its sale of Energy 11, L.P. (“Energy 11”) and Energy Resources 12, L.P. (“Energy 12”), illiquid limited partnerships that invested in the oil, gas, and energy sector. To read more about Energy 11 and Energy 12, please click on the following link: Energy 11, L.P. and Energy Resources 12 L.P.: How to Recover Investment Losses from David Lerner Associates, Inc.

Earlier this year, the Financial Industry Regulatory Authority (“FINRA”) suspended former David Lerner Associates financial advisor, Charles Bonilla, from the securities industry for five months for recommendations of what is believed to be SOAEX and Energy 11. FINRA concluded that Mr. Bonilla lacked a reasonable basis to recommend these products because he did not perform reasonable diligence before making the recommendations and failed to understand their fundamental features and risks. To read more about the suspension of Charles Bonilla and FINRA’s allegations, click on the following link: Former David Lerner Associates Financial Advisor, Charles Bonilla, Suspended by FINRA for Unsuitable Energy-Sector Securities – Boca Raton, FL

How to Recover Financial Losses

When an investor suffers investment losses due to misconduct by a financial advisor or broker-dealer, the investor can file a securities arbitration claim against their financial advisor and/or broker-dealer to be compensated.

Brokerage firms like David Lerner must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise its financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

Securities arbitration is a unique and complex practice area. Investors should seek out experienced counsel who understands the FINRA forum and can navigate the arbitration process to effectively advocate on their behalf.

If you or a loved one were a customer of David Lerner and either sustained financial losses or suspect that the firm did not have your best interest in mind when recommending investments or account transactions, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

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