A Financial Industry Regulatory Authority Panel is ordering Mid Atlantic Capital Corp. to pay David Wellman and Beverly Bien $922K. The married couple sued the independent brokerage firm for losses they sustained after they invested in\u00a0Sonoma Ridge Partners (a real estate private placement), KBS-sponsored nontraded REITs, silver and gold exchange-traded funds\u00a0 (ETFs) like iShares Silver and Market VectorsGold Minors, and Contago Oil and Gas\u00a0securities.\u00a0They\u00a0alleged that Mid Atlantic Capital Corp. was liable for\u00a0negligent misrepresentation, negligence, omissions, breach of fiduciary duty, breach of contract, negligent supervision, restitution, common law fraud, and violation of Colorado’s Securities Act.<\/p>\n
The couple was close to retirement age when they made the investments several years ago prior to the 2008 economic collapse.\u00a0According to the couple\u2019s legal team, among the issues that they believe were problematic is that Mid Atlantic\u2019s two brokers that managed Sonoma Ridge Partners were not the same brokers who marketed and sold the private placement to investors. The claimants believe that this presented a conflict of interest.<\/p>\n
Previously called\u00a0the Jadda Secured Senior Mortgage Fund,\u00a0\u00a0Sonoma Ridge Partners\u00a0was promoted as an alternative to low-yielding CD\u2019s, as well as to the stock market with its volatility. It was supposed to render 9-11% annual yields. Also, although Bien bought most of the illiquid real estate investments, she lacked the required net worth necessary to qualify as an accredited investor under private placement industry rules.<\/p>\n