According to reports, FINRA recently barred former LPL Financial broker Gary Chackman for several violations of securities industry rules, including falsifying documents. These violations allegedly related to his sale of nontraded real estate investment trusts (REITS) from 2009 to 2012.
According to his BrokerCheck report, Gary Chackman was registered with LPL from 2001 to 2012, when LPL terminated his registration for violation of the firm’s policies and procedures relevant to the sale of alternative investments.
The White Law Group continues to investigate claims involving nontraded REITs. Nontraded REITs are high-commission products, typically paying registered representatives a sales commission of 7%.
Regulators have also been paying attention to brokerage firms’ sales of nontraded REITs. This year, the Massachusetts Securities Division reached settlement agreements with six broker-dealers for $21.6 million in restitution to clients over sales of nontraded REITs. The firms, including LPL, have paid fines of close to $1.5 million.
The restitution and fines were related to instances in which clients of brokers affiliated with the firms had more than 10% of their liquid net worth invested in nontraded REITs, a violation of Massachusetts rules.
According to the Finra letter of acceptance, waiver and consent (AWC), Mr. Chackman “recommended and effected unsuitable transactions in the accounts of at least eight LPL customers, by overconcentrating his customers’ assets in [REITs] and other illiquid securities,”
The AWC also stated that “Chackman falsified LPL documents to evade the firm’s supervision and caused the firm’s books and records to be inaccurate by submitting dozens of ‘alternative investment purchase’ forms that misrepresented his customers’ purported liquid net worth.”
Mr. Chackman’s BrokerCheck report also lists three arbitration claims have been filed against him.
The White Law Group is investigating the liability that LPL may have for failure to supervise Mr. Chackman. Brokerage firms have an obligation to supervise their financial advisors and to ensure that they are complying with industry rules and standards. To the extent that it can be demonstrated that LPL failed to properly supervise Mr. Chackman, LPL may be held liable in a FINRA arbitration claim.
If you invested with Mr. Chackman and are concerned about your investments, please call the securities attorneys of The White Law Group at 312/238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on the firm, visit http://www.whitesecuritieslaw.com.