Massachusetts and New Hampshire Fines Next Financial Group for Supervisory Issues
According to the public records this week, two states reportedly fined Next Financial Group with $475,000 for supervisory failures in connection with the sales of non-traded Real Estate Investment Trusts (REITs).
The Massachusetts Securities Division reportedly reached a settlement and fined Next Financial $150,000 last Thursday for alleged sales practice violations and a failure to supervise, including the purported unsuitable sales of non-traded REITs by a financial advisor during a 10-year period, according to reports last week.
According to Massachusetts, many of the sales allegedly exceeded limits as determined by a client’s overall liquid net worth.
The New Hampshire Bureau of Securities Regulation reportedly settled with Next Financial on Tuesday hitting Next Financial with a fine of $235,000 and costs of $90,000 for purportedly failing to reasonably supervise the sale of certain alternative investments to a number of clients, including unsuitable sales of nontraded REITs.
New Hampshire reportedly received a complaint from an individual alleging that a Next Financial advisor Charles Chester Kulch had sold him securities that were unsuitable.
Kulch has reportedly been registered with Next Financial since 2006 and allegedly has 10 disclosure events on his broker report including 6 customer complaints and 4 regulatory events. Allegations include unsuitable investments and “high risk, speculative, illiquid private placements” among others.
Non-Traded REITs are generally speculative, high risk investments and due to these risks are often unsuitable for most investors.
As part of the settlement agreement, the Next reportedly agreed that Kulch would work under heightened supervision by the firm and that it would not allow him to sell REITs and other alternative investments.
Next Financial reportedly agreed to make offers to remediate clients in both states.
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This information is publicly available on FINRA’s website and provided to you by The White Law Group. If you are concerned about investments you made with Next Financial Group and Charles Chester Kulch the securities attorneys at The White Law Group may be able to help you.
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