Former David Lerner Associate Broker May Have Sold Spirit of America Energy Fund Among Others to Customers
The Financial Industry Regulatory Authority (FINRA) has suspended Florida-based broker, Charles Bonilla, for six months. The action comes over allegations that he unsuitably recommended two energy investments to customers while he was a David Lerner Associates stockbroker without having enough knowledge about them.
Bonilla agreed to the FINRA suspension. He will pay both a $5K penalty and more than $22,400 in disgorgement plus interest. However, he is not denying or admitting to the self-regulatory organization’s (SRO’s) findings.
Based on FINRA’s FINRA Letter of Acceptance, Waiver, and Consent, which doesn’t name the investments, Bonilla may have sold the mutual fund Spirit of America Energy Fund (SOAEX) and Energy 11 or Energy Resources 12 to his former customers. These are all illiquid, risky investments, proprietary to David Lerner Associates, and definitely should not be recommended to just anyone.
Yet it appears that the firm’s brokers marketed and sold them to customers even when they were not a suitable match for their financial goals, risk tolerance level, and other criteria. Last year, all three investments experienced significant volatility in the wake of COVID-19.
Our oil and gas investment fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm at inverstorlawyers.com) have been investigating current and former David Lerner Associates registered representatives over losses sustained by its customers in Spirit of America Energy Fund (SOAEX), Energy 11, and Energy Resources 12.
Alleged Due Diligence Failures Created Risk Exposure
Charles Bonilla was a David Lerner Associates broker from 2015 to 2018. He became a Pruco Securities registered representative from 2018 to 2019.
According to the FINRA letter, not only did Bonilla unsuitably recommend energy sector investments to customers but also his failure to perform reasonable due diligence meant that he likely exposed them to possible risks and costs even he didn’t fully comprehend.
The investments included a limited partnership (LP) set up to acquire and develop onshore oil and gas properties in the United States and a mutual fund heavily invested in a combination of securities, energy assets, and energy-related companies.
With the David Lerner Associates mutual fund, three customers collectively invested $250K and Bonilla made $4,355 in commissions. With the limited partnership, two investors collectively invested over $650K and Bonilla earned over $18K in commissions. Last year, the limited partnership told investors that distributions were being suspended.
According to his BrokerCheck record, Charles Bonilla worked 21 years in the industry. Previous to David Lerner Associates, other brokerage firms where he used to be registered include Scottrade, where he was fired in 2014, T Rowe Price Investment Services, ECHOtrade, TradeStation Securities, Charles Schwab, and Noble International Investments.
Experienced Securities Fraud Law Firm
If you suffered significant investment losses while working with ex-David Lerner Associates Charles Bonilla or any other registered representative from that firm, contact our securities fraud attorneys at SSEK Law Firm and ask for your free, no-obligation case consultation. In Florida, call (813) 560-2992. In the rest of the US call (800) 259-9010.