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K-1 Tax Documents Delayed Past Tax Deadline

In the latest GPB Capital news, the firm has notified investors of its GP Holdings II, LP fund that they won’t be getting their 2019 Schedule K-1 tax documents ahead of or by July 15, 2020, which is when US tax filings are due this year. The filing deadline was extended by the Internal Revenue Service (IRS) from its usual April 15 date as part of the US government’s COVID-19 relief. 

This is the latest delay by the alternative asset firm, which has yet to provide key financial statements to investors and regulators for the past few years and is accused of operating a more than $1.5 B Ponzi scam. 

Non-Traded Real Estate Investment Trusts Are Risky, Illiquid 

If you are a retail investor in San Francisco whose broker is recommending that you invest in non-traded real estate investment trusts (non-traded REITs), you should strongly reconsider. 

While often touted as a security that allows investors to make money without having to worry about market volatility – this type of investment is actually still high risk, illiquid, and not suitable for many customers including retail investors, retirees, and other conservative investors with low-risk tolerance levels.

Another National Securities Broker Is Accused of Making Inappropriate Recommendations 

Frank Avallone, a National Securities broker since 2015,  is currently the subject of two pending customer complaints accusing him of making unsuitable investment recommendations that resulted in six-figure losses for each claimant. He is not the only registered representative from this firm accused of suitability issues.

Unsuitable investments are any recommendation that is inappropriate for the investor. Such a recommendation is contrary to a broker’s duty to only make investment recommendations that are appropriate for the customer as it pertains to their age, financial resources, investing experience, and risk tolerance level. 

Business Development Company May Have Been Unsuitable For Some Investors 

If you are an investor who suffered losses after your stockbroker recommended the Franklin Square KKR Capital II Fund (FSKR), also known as FS KKR Capital Corp II, you may have grounds for pursuing a broker fraud claim for damages. 

This business development company (BDC), which is a merger of four non-traded BDCs, reportedly was unsuitably recommended to a number of customers and/or the risks were never fully disclosed to them.

Senior Investors Lose Money in Risky Structured Product Tied To Price of Oil  

An elderly retiree couple has filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against LPL Financial, LLC and its broker, Bret Alexander Hartman, to recover losses they sustained in a structured product tied to the price of oil. In their broker fraud case, they are alleging unsuitable investment recommendations, misrepresentations and omissions, and other claims. 

Our structured product fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) are representing these claimants, who are in their eighties and nineties and never should have been invested in a structured note that exposed them to the volatile oil and gas sector.

Crown Capital Securities Broker Was Recently Named in Four FINRA Arbitration Claims  

Dennis Haywood, a Crown Capital Securities broker, is now named in four customer disputes, all of which were filed in the last two months with the Financial Industry Regulatory Authority (FINRA). Haywood is also a Purepath Wealth Management investment adviser. 

The claimants are accusing him of making inappropriate investment recommendations of non-traded real estate investment trusts (non-traded REITs), non-traded business development companies (BDCs), alternative investments, and variable annuities (VA).

COVID-19 Causes This Mortgage REIT to Drop in Value  

If you lost money from investing in Granite Point Mortgage Trust (GPMT), you may be able to file a Financial Industry Regulatory Authority (FINRA) arbitration claim against the broker and their brokerage firm that sold this real estate investment trust (REIT) to you. Unfortunately, shares of Granite Point Mortgage Trust plunged in March in the wake of COVID-19 and continued to drop.

Our REIT fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK) are speaking with GPMT investors to help them explore whether they have grounds for a broker negligence case. 

Did Brokers Recommend This Unregistered Security Because of High Commissions?

Investors who backed Moody National REIT II, a nontraded real estate investment trust, are now grappling with losses sustained after this investment significantly plunged in value and the company’s public offering and distribution payments were suspended. 

Nontraded REITs, which are very high risk, are not for every investor, and yet the 7% commission the REIT paid stockbrokers may have been incentive enough to recommend them to customers even when they weren’t in the latter’s best interests.

Barred Stockbroker Faces Criminal and SEC Charges for Senior Investor Fraud 

Frederick Stow (CRD#: 864436), a former Raymond James broker based out of Tennessee, is now the subject of criminal charges accusing him of securities fraud, identity theft, and wire fraud for allegedly stealing $943,500 from the IRAs and other accounts of two senior investors between 2015 and 2019. 

The broker-dealer fired him last year and the Financial Industry Regulatory Authority (FINRA) barred him in January. The US Securities and Exchange Commission (SEC) recently filed a parallel civil lawsuit against Stow.

FINRA Says SagePoint Financial Brokers Unsuitably Recommended Early UIT Rollovers 

The Financial Industry Regulatory Authority (FINRA) is ordering SagePoint Financial to pay over $1.6M in fines and restitution after it executed over $895 million in unit investment trust (UIT) transactions that resulted in more than $17.2 million in sales charges. 

Of these UIT transactions, over $203.7 million of the proceeds were from sales that occurred over 100 days before a UIT’s maturity date. FINRA found that these unsuitable early rollovers caused customers to pay over $1.3 million in sales charges that they wouldn’t have otherwise if only they’d held onto their UITs until they matured.

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