According to reports, FINRA recently fined broker-dealer Berthel Fisher and an affiliate $775,000 in connection with compliance failures, including inappropriate sales of alternative investments and nontraditional exchange-traded funds.
According to FINRA, Berthel Fisher failed to supervise the sale of alternative investments, such as non-traded real estate investment trusts, and leveraged and inverse ETFs.
FINRA alleges that between 2008 and 2012, Berthel Fisher had inadequate supervisory systems and written procedures for sales of the alternative investments, which also included managed futures, oil and gas investments, equipment-leasing programs and business development companies.
FINRA also alleged that Berthel Fisher conducted poor suitability reviews of products and failed to properly train employees, who manually recorded some, but not all, of their clients’ alternative investment exposure. Such alleged failures may have exposed clients to overconcentration in a particular asset class, investment sector, or category of risk.
The White Law Group continues to investigate the liability that brokerage firms have for unsuitably investing clients in alternative investments like nontraded REITs, oil and gas limited partnerships, equipment leasing funds, and leveraged and inverse ETFs.
Brokerage firms are required to perform adequate due diligence on any investment they recommend. Additionally, broker-dealers must only recommend investments that are suitable for the client in light of the client’s age, investment experience, net worth, and investment objectives. To the extent that a brokerage firm fails to perform adequate due diligence or makes unsuitable investment recommendations, the firm may be held liable for any resulting losses in a FINRA arbitration claim.
If you suffered losses investing in alternative investments and would like to speak to a securities attorney to discuss your litigation options, 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.