Have you suffered losses investing in the private-placement offerings — DT Florida, DT Atlanta, and Fresh Start? If so, The White Law Group may be able to help.
The Financial Industry Regulatory Authority Inc. (FINRA) has expelled Markel Newton, a real-estate firm in California formerly known as DT Securities, for making negligent misrepresentations in private placements.
The owner and CEO, Daniel Markel, was at the same time barred for alleged violations in two DT offerings to buy real estate in Florida and Georgia, and a third set up to own and run treatment facilities for alcoholics in California, according to a Finra settlement notice on Friday.
The firm and Mr. Markel should have disclosed in the three private-placement offerings — DT Florida, DT Atlanta, and Fresh Start — that the California Department of Real Estate had filed a complaint against him in 2010. He also allegedly released escrow proceeds to buy properties before meeting funding-raising targets that were spelled out in the DT Florida and DT Atlanta offerings, according to Finra.
DT Florida originally sought to raise at least $3 million by Nov. 30, 2009, later extending the closing date to Jan. 29, 2010 with the requirement to return funds to investors if that goal wasn’t reached. DT Atlanta initiated a private-placement offering in March 2011 with the aim of raising at least $1.7 million. That minimum was later reduced to $400,000, a target that was never properly met, according to the settlement document.
The Finra document also pointed to Mr. Markel’s failure to alert investors to a prior breach in credit obligations.
In a 2013 private-placement memorandum for “Fresh Start,” the offering relating to alcoholic treatment centers in California, Markel didn’t inform investors that a judgement had been entered against him and others the year before for breaching their obligation to repay a $1.9 million credit line with Pacific Western Bank. Fresh Start had been seeking to raise as much $2 million from investors.
Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations to ensure that each investment recommendation that is made is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.
However, another problem with Reg D private placements is that the high sales commissions and due diligence fees the brokers earn for selling such products sometimes can provide brokers with an enormous incentive to push the product to unsuspecting investors who do not fully understand the risks of these types of investments or to outright misrepresent the basic features of the products – usually focusing on the income potential and tax benefits while downplaying the risks.
Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes and if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.
To determine whether you may be able to recover investment losses incurred as a result of your purchase of DT Florida, DT Atlanta, and/or Fresh Start private placement investments, please contact The White Law Group at 1-888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. The firm represents investors throughout the country in claims against their brokerage firm.
For more information on The White Law Group, visit https://www.whitesecuritieslaw.com.