Claimant Suffered Losses in Priority Income Fund, Moody National REIT and Other Alternative Investments

A Durango retiree is suing Centaurus Financial for up to $500,000 following significant losses in high-risk, illiquid alternative investments recommended by broker Bill Burks II. The lawsuit alleges that Burks, who was previously suspended by FINRA for unsuitable sales practices, unsuitably overconcentrated the client’s portfolio in non-traded REITs and private funds that are now nearly worthless.

A Durango, Colorado investor is suing Centaurus Financial for up to $500,000, plus interest and costs, after she sustained losses in a number of illiquid, high-risk alternative investments that she alleges were unsuitable recommendations.

Shepherd Smith Edwards and Kantas Alternative Investment Loss Lawyers (investorlawyers.com) are representing this retiree in her FINRA lawsuit involving the following:

Priority Income Fund
Carter Validus, which is a non-traded REIT
Moody National REIT II
American Hospitality Properties Fund, III (AH REIT)
Cantor Fitzgerald Income Trust, which is a non-traded REIT

Many of the investments, which she was told were performing well, are nearly worthless now

Why Are Investors, Including Those with Ties to Southwest Airlines, Accusing Centaurus Financial Advisor Bill Burks II of Broker Fraud?

This investor worked with Centaurus broker William “Bill” Charles Burks II. She is not the only Claimant we are representing who had him as their financial advisor and is now suing this broker-dealer. Bill Burks II is accused of making unsuitable investment recommendations to a number of individuals, including Southwest Airlines flight attendants.

In 2021, the Financial Industry Regulatory Authority (FINRA) began investigating Burks over his sales practices involving alternative investments. The self-regulatory organisation (SRO) suspended him for four months last year after accusing him of excessive concentration and unsuitability when it came to marketing and promoting illiquid, high-risk products to investors with low-to-moderate risk tolerance levels.

Bill Burks II’s BrokerCheck CRD lists eight customer disputes alleging unsuitability. The majority of these investor lawsuits are pending or have been settled.

In her FINRA arbitration case against Centaurus Financial, this senior investor is alleging the following:

Broker fraud
Overconcentration
Unsuitability
Misrepresentations and omissions
Breach of contract
Statutory fraud
Breach of fiduciary duty
Unjust enrichment
Failure to supervise
And more.

I’m An Investor. What Should I Know About Independent Brokerage Firms, Non-traded REITs and Private Funds?

These alternative investments are developed almost exclusively to be sold by independent broker-dealers like Centaurus Financial.
Because the business model of these broker-dealers typically involves paying their brokers up to 95% of the commissions, these firms have to sell higher commission products to survive.
Alternative investments will typically charge customers up to 8% in upfront commissions, and there is often a “due diligence” fee of 3% that goes directly to the selling brokerage firm.
Alternative investments are usually sold to investors because these are the products that are the most profitable for broker-dealers and their registered representatives.

Why Are Non-Traded REITs Compared To Ponzi Scams?

These investments usually offer a high monthly payout compared to other investments from the start.
Yet often, especially in the beginning, there is no actual income being generated yet.
Because of this, monthly returns are typically at first either from the non-traded investor’s own money or the money of other investors, which is a good description for what may be considered a Ponzi scam.

Why You Should Hire Our Alternative Investment Loss Lawyers To Represent You

Shepherd Smith Edward and Kantas Alternative Investment Loss Lawyers represent investors against brokerage firms, including Centaurus Financial.
We are seasoned securities attorneys committed to fighting for our clients’ financial recovery while protecting their legal rights.
More than 90% of our Clients have secured full or partial financial recovery in awards and settlements.

Find Out Whether You Have An Alternative Investment Recovery Claim

Call our Alternative Investment Loss Lawyers at (800) 259-9010 or contact us to schedule your free case consultation.