A Berthel Fisher & Company Financial Services, Inc. customer has recently filed a complaint with FINRA Dispute Resolution Services alleging that former broker Robyn D. Simons recommended unsuitable investments in real estate investment trusts (REITs) and business development companies (BDCs). The investments were reportedly purchased between 2014 and 2016. The complaint also alleges that Berthel Fisher & Company Financial Services, Inc. failed to supervise Robyn Simons’ actions. The customer has alleged $200,000 in damages.
This complaint is not the first securities arbitration claim filed against Robyn Simons and Berthel Fisher & Company Financial Services, Inc. arising out of Robyn Simons’ investment recommendations. In 2015, a customer filed a FINRA arbitration complaint alleging that investments made in her accounts between 2013 and 2015 were unsuitable. The customer also alleged that Robyn Simons misrepresented the securities to her at the time of purchase. Reportedly, the investments included a REIT, BDC, Unit Investment Trust (UIT), and equities. According to Robyn Simons’ BrokerCheck Report, Berthel Fisher & Company Financial Services, Inc. settled the matter with the aggrieved customer for $21,500.
Robyn Simons was registered with Berthel Fisher & Company Financial Services, Inc. in Layton, Utah, from February 2008 until September 2017.
If you have suffered financial losses investing with Robyn D. Simons or Berthel Fisher & Company Financial Services, Inc., or suspect that Robyn Simons did not have your best interest in mind when recommending investments, including REITs and BDCs, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your account or annuity contract.
Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as Berthel Fisher & Company Financial Services, Inc.
Real Estate Investment Trusts (REITs)
A real estate investment trust (REIT) is an investment vehicle that allows investors to invest in income-producing real estate. REITs may own a wide range of real estate assets such as apartments, offices, commercial buildings, warehouses, etc. REITs let investors pool their money with other investors to invest in real estate without owning real estate assets individually. Instead, an investor owns shares in a REIT, and in doing so, they add the individual real estate assets owned by the REIT to the investor’s portfolio. Among other things, REITs are attractive to income-seeking investors for their regular dividend payments and higher-than-average yields. REITs may also provide an investor with diversification in their portfolio. But even with these apparent benefits, investors should understand the inherent risks of REITs and how to manage them. To read more about REITs, click here.
Business Development Companies (BDCs)
Business development companies (BDCs) are organized to invest in two types of businesses: 1) small- and medium-sized companies in their initial development stages and 2) distressed companies looking to balance their finances. BDCs are similar to closed-end investment funds in that their shares are registered with the U.S. Securities and Exchange Commission (SEC). Registration provides some investor protections such as disclosure about the BDC’s investments and certain restrictions on the use of leverage. BDCs may be publicly-traded, non-traded, or structured as private BDCs.
Typically, a BDC must invest at least 70% of its assets in U.S. non-financial sector operating companies that are not listed (i.e., private companies) or public companies with a market cap of less than $250 million.
Though BDCs may be attractive to investors due to their high dividend yields, they are often considered high-risk investments with high sales commissions and unfavorable fee structures. In particular, FINRA has previously cautioned investors about the risks of non-traded or unlisted BDCs, which may be illiquid and offer investors limited opportunities to exit (i.e., periodic share repurchases at high discounts). They are considered high-risk, speculative investments for elderly customers.
Berthel Fisher & Company Financial Services, Inc.: Repeated Supervisory Violations
Financial institutions, like Berthel Fisher & Company Financial Services, Inc., must properly supervise financial advisors and customer accounts. Brokerage firms are required to establish and maintain a reasonably designed system to oversee account activity, such as its suitability review of transactions in REITs, BDCs, and Unit Investment Trusts, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.
Since 2014, Berthel Fisher & Company Financial Services, Inc. has twice been sanctioned for supervisory failures related to its suitability review of transactions in REITs, Unit Investment Trusts, and other alternative investments. In total, Berthel Fisher & Company Financial Services, Inc. has paid over $1.33 million in monetary fines, restitution, and disgorgement of gains. Below is a summary of Berthel Fisher & Company Financial Services, Inc.’s recent relevant disciplinary history:
Disciplinary Proceeding No. 2014039169601: On February 5, 2018, FINRA accepted Berthel Fisher’s Offer of Settlement in a disciplinary matter involving, among other things, inadequate supervisory systems and written procedures, including those concerning its suitability review of transactions in short-term trading of unit investment trusts (UITs) and mutual fund switches. Berthel Fisher’s customers paid excessive sale charges of approximately $667,000. Berthel Fisher directly profited from its supervisory failures.
Berthel Fisher accepted and consented to the imposition of a censure, fine of $225,000, payment of restitution to customers in the total amount of $117,315, and disgorgement of $299,472.
Disciplinary Proceeding No. 2012032541401: On February 24, 2014, FINRA accepted a Letter of Acceptance, Waiver, and Consent from Berthel Fisher in a disciplinary matter involving, among other things, inadequate supervisory systems and written procedures, including those concerning its suitability review of transactions in non-traded REITs, non-traditional ETFs, and other alternative investments.
Berthel Fisher accepted and consented to the imposition of a censure, fine of $675,000, and payment of restitution to customers in the total amount of $13,292.
How to Recover Financial Losses or Obtain a Free Consultation
If you have lost money with financial advisor Robyn D. Simons or Berthel Fisher & Company Financial Services, Inc., contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.