According to the claim, the woman was sold non-traded REITs and other alternative investments by Jonathan Pyne, a broker for Berthel Fisher. The claim argues that her age and low risk tolerance made the investments unsuitable for her. The investments included:

• Inland American Real Estate Trust
• Wells REIT
• Cornerstone Core Properties REIT
• Gulf Coast Rig & Equipment
• REEF Oil & Gas Income and Development
• Leaf Equipment Leasing Income Fund III

Securities arbitration lawyers say that these investments are illiquid and, in many cases, may have been negligently misrepresented. In this woman’s case and possibly many others, the investments also allegedly represented a concentration level of her liquid net worth that was too large to be suitable.

Firms have an obligation to properly supervise their brokers and fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance.

Non-traded REITs are attractive to investors because they carry a relatively high dividend or interest. According to investment fraud lawyers, however, these investments are inherently risky and illiquid, which limits access of funds to investors and makes them unsuitable for many individuals with conservative risk tolerances and those who need easy access to funds, especially when over-concentrated. Leveraged and inverse ETFs are designed to meet daily objectives, and “reset” each day. As a result, the performance of these investments can diverge from the performance of the underlying benchmark or index very quickly, and the problem is exasperated in volatile markets, making these investments unsuitable for many investors as well.

If you were sold unsuitable alternative investments from a Berthel Fisher broker, including non-traded REITs, inverse and leveraged ETFs and/or Oil & Gas Partnerships, you may be able to recover your losses through a securities arbitration claim. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

According to the FINRA investigation’s findings, Berthel Fisher did not have adequate written procedures and supervisory systems in place from January 2008 to December 2012 for the following alternative investments:

• Non-traded REITs
• Oil and gas programs
• Managed futures
• Business development companies
• Equipment leasing programs

Allegedly, the firm did not accurately calculate alternative investment concentration levels in some cases and, as a result, did not correctly adhere to suitability standards in those instances. Furthermore, Berthel Fisher staff was not adequately trained on the suitability standards for individual states.

In addition, from April 2009 to April 2012, Berthel Fisher allegedly did not have a “reasonable basis” for certain leveraged and inverse ETF sales, according to FINRA’s findings. FINRA investigators also found that non-traditional ETFs were not adequately researched or reviewed, and that the sales force was not adequately trained before registered representatives were allowed to make customer recommendations. Stock fraud lawyers believe that many customers may have suffered significant losses as a result of the recommendation and sale of these products, which were unsuitable for many investors.

Under FINRA rules, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. Furthermore, securities fraud attorneys say that firms have an obligation to properly supervise brokers’ activities while they are registered with the firm.

If you suffered significant losses in non-traded REITs or inverse and leveraged ETFs sold by Berthel Fisher or Securities Management & Research Inc., you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.