Retiree Alleges Overconcentration in Spirit of America Energy Fund
David Lerner Associates and its registered representative, Gary Walter Isler, are once again the subject of a Financial Industry Regulatory Authority (FINRA) arbitration claim. The claimant, an elderly widow, is accusing them of causing her to suffer significant retirement losses by unsuitably overconcentrating her portfolio in the Spirit of America Energy Fund.
This is not the first customer dispute naming Isler, who has been a David Lerner Associates stockbroker for almost 30 years.
The broker-dealer, meanwhile, has been under scrutiny over its sale of oil and gas energy investments in the Spirit of America Energy mutual fund (SOAEX) and non-public limited partnership Energy 11 LP and Energy Resources 12. The firm is the originator of all three investments and sells them exclusively to its customers.
Our oil and gas investment fraud lawyers have been speaking to customers of David Lerner Associates who were persuaded by the firm to invest in Energy 11, Energy Resources 12, or Spirit of America Energy Fund, which has lost most of its value in the last several years. Unfortunately, one or more of these investments may have been unsuitably recommended to you. Contact Shepherd Smith Edwards and Kantas (SSEK Law Firm) today.
Senior Investor Wanted Conservative Investments, Very Low Risk
In this most recent FINRA arbitration claim, the widow, who is a conservative investor, only wanted safe, low-risk investments and strategies. Instead, Isler and David Lerner Associates allegedly used a risky and unsuitable strategy involving the Spirit of America Energy Fund without her consent while misrepresenting that it was appropriate for her investment goals.
The truth is that this mutual fund, as well as Energy 11 LP and Energy Resources 12, are not conservative investments. Highly concentrated in the oil and gas energy sector, which is a very volatile arena, these investments are inappropriate for those unable or unwilling to take on a lot of risks, including most retirees.
Not only that, but the Spirit of America Energy Fund is invested in some of the most high-risk investments in the energy sector, including master limited partnerships (MLPs) and, exploration and production master limited partnerships. Many of the MLPs in this mutual fund have filed for bankruptcy.
New Jersey Broker Has Been Named in Three Other FINRA Arbitration Claims
According to his BrokerCheck record, Gary Isler has worked 33 years in the industry, most recently out of Teaneck, New Jersey. Before David Lerner Associates, he was a registered representative at The Dreyfus Service Corporation and before that with Municipal Investors Service.
Isler has been named in three other FINRA arbitration complaints alleging unsuitability, misrepresentations and omissions:
- A customer dispute in 2018 settled for nearly $16K. The claimant had sought $350K in damages.
- A 2016 investor claim that requested $340K damages was settled for $20K.
- Another unsuitability case, from 2015, led to an approximately $20K award. The customer had sought over $162K in damages.
Spirit of America Energy Fund, Energy 11, Energy Resource 12 Losses
Losses involving oil and gas investments only grew this year in the wake of the market volatility that resulted because of COVID-19.
If you lost money because a David Lerner Associate sold you investments in Energy 11, Energy Resource 12, or Spirit of America Energy Fund, our securities fraud lawyers can help you explore your legal options. We represent senior investors, retail investors, conservative investors, high net worth investors, sophisticated investors, and institutional investors.
SSEK Law Firm is also looking into customer claims involving New Jersey broker, Gary Isler. Working with experienced broker fraud lawyers will maximize your chance of financial recovery. SSEK Law Firm has been successfully fighting for investors for 30 years. Contact us today.