A number of investors have recently filed arbitration claims with the Financial Industry Regulatory Authority (“FINRA”) against broker Austin Richard Dutton, Jr. (CRD# 2739167). Publicly available information indicates that Mr. Dutton was previously affiliated with Newbridge Securities Corporation (“Newbridge”) (CRD# 104065) from 2007-2017. Currently, Mr. Dutton is affiliated with Sandlapper Securities, LLC (“Sandlapper”) (CRD# 137906), and conducts his financial advisory business through his own independent firm, Bridge Valley Financial Services, LLC. Upon information and belief, Mr. Dutton marketed certain risky non-traded investment products to a client base which includes Philadelphia law enforcement and firefighters.
According to publicly available information, Mr. Dutton appears to have recommended and sold certain complex and risky non-conventional investments (“NCIs”) including direct participation programs (“DPPs”) and non-traded financial products, including non-traded REITs. In particular, it appears that Mr. Dutton recommended and sold numerous non-traded REITs previously packaged and marketed by Nicholas Schorsch’s firm, American Realty Capital (ARC), now known as AR Global.
FINRA disclosures concerning Mr. Dutton include, but are not limited to, four pending customer complaints and a July 2017 regulatory enforcement proceeding by state securities regulators. Of the pending complaints, three pending customer disputes were filed in December 2017 and all center on allegations of unsuitability, misrepresentations, and omissions of material facts concerning the risks and features of certain securities.
With respect to the July 18, 2017 enforcement matter, the Commonwealth of Pennsylvania Department of Banking and Securities fined Mr. Dutton’s former firm, Newbridge, $499,000 for failure to supervise a broker in connection with sales of various products to his clients. While the Order underlying the Pennsylvania enforcement proceeding did not name the broker, FINRA does disclose that Mr. Dutton, as of July 24, 2017, is ordered to “[p]ay the Department an administrative assessment of $200,000” This fine relates to allegations that Mr. Dutton “[r]recommended the purchase of a security to at least one customer without reasonable grounds to believe that the transaction was suitable for the customer. Dutton engaged in dishonest and unethical practices in the securities business by recommending to a customer the purchase, sale, or exchange of a security without reasonable grounds to believe that the transaction or recommendation was suitable for the customer based upon reasonable inquiry concerning the customer’s investment objectives, financial situation and needs….”
Among the many duties and responsibilities that brokers and brokerage firms owe to their clients are the duties to “conduct business with high standards of commercial honor” and “maintain just and equitable principles of trade” (FINRA Rule 2010). In addition, FINRA’s often discussed ‘suitability rule’ (FINRA Rule 2111) mandates, in part, that a broker and his or her employer must seek to ensure that the purchase of a recommended security is in keeping with the customer’s risk profile and stated investment objectives. Certain non-conventional investments, including non-traded REITs and DPPs, quite often are fraught with risks, including high fees, lack of transparency as to the underlying assets, and lack of liquidity.
If you have invested with Mr. Austin Dutton and have suffered losses, or are currently unable to exit your illiquid investment position without incurring losses, you may be able to recover your losses in FINRA arbitration. Investors may contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or firstname.lastname@example.org for a no-cost, confidential consultation.