Broker Alan Douglass Unsuitably Overconcentrated Investor’s Funds in Non-Publicly Traded Products
An investor based in Lutz, Florida has filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against Securities America. This investor suffered losses in real estate investment trusts (REITs) and other non-publicly traded investments. The claimant, who is a retiree, suffered up to $500K in investment losses, which he is seeking in damages.
Securities America broker, Alan Duane Douglass, was this claimant’s financial advisor. He not only unsuitably recommended private placements and real estate investment trusts (REITs) to this customer but also, overconcentrated the customer’s portfolio with these risky investments.
Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyer.com) is representing this Florida retiree in his FINRA arbitration case against Securities America. A panel of arbitrators will hear the investor claim in Boca Raton, Florida.
Senior Investor Was Told His Investing Strategy Was Low Risk, Designed for Making Income
This claimant began working with Douglass while the latter was an Investacorp broker, which was then later acquired by Securities America. From the beginning, the Securities America broker reassured him that he would apply an investment strategy with minimal risks. Additionally, the investor was told his brokerage account would be set up for a return of principal and income.
This retiree entrusted Securities America with a significant chunk of his retirement funds. Although educated, he is an unsophisticated investor with little knowledge of publicly and non-publicly traded REITs or how speculative they are. Regardless, these and the other privately traded investments that were recommended to him were misrepresented and touted as safe and would provide him with income.
Claimant’s Portfolio was Improperly Allocated and Aggressively Invested
Instead, the claimant’s funds were aggressively invested in unsuitable investments that lacked proper allocation and became overconcentrated in his portfolio. Too much emphasis was placed on untraded and unregistered products such as private placements. These types of investments have limited disclosures, are only suitable for accredited investors, and tend to pay high commissions.
Examples of some of these investments include:
- Hospitality Investors Trust
- New York City REIT
- Phillips Edison and Company
Hospitality Investors Trust has filed for bankruptcy, New York City REIT has been the subject of fraud allegations, and Phillips Edison REIT suspended investor distributions in 2019. These REITs have all been recently named in numerous FINRA arbitration claims brought by investors. Many of whom have suffered significant losses because their broker-dealer unsuitably sold these products. Such investments should never have been recommended or overconcentrated in the portfolio of someone who at the time was nearing retirement.
Securities America Failed to Supervise Douglass
Securities America’s supervision of Douglass or the customer’s account was simply inexcusable, with no meaningful communication with a supervisor, or even compliance, until it was too late. It also appears that Securities America broker Alan Douglass was self-supervised. Supervisory systems that could have protected this investor appeared to be lacking at the firm.
After suffering significant losses, this Florida retiree is alleging the following acts of investment fraud:
- Unsuitable recommendations
- Lack of proper due diligence
- Misrepresentations and omissions
- Gross lack of supervision
- Grossly negligent behavior
- Breach of fiduciary duty, and other claims.
With 34 years in the industry, Douglass remains a Securities America financial advisor. He has two existing disclosures on his BrokerCheck record. One is a pending customer dispute brought in March alleging the unsuitability of alternative investments. The other claim is from 1993 and alleges misrepresentations that led to losses which were settled for $3K.
This Securities America broker has been a financial advisor at various brokerage firms including Meridian Dunhill, Barron Chase Securities, Lehman Brothers and Thomas James Associates to name a few.
Seasoned Private Placement & REIT Fraud Lawyers
If you suffered losses while working with Securities America broker Alan Douglass or any other financial advisor, contact our Florida REIT attorneys today at (813) 560-2992. Our experienced lawyers have successfully recouped losses for investors all over the United States and abroad. For investors based nationwide, call our law firm at (800) 259-9010 today.