Securities Lawyers Blog
Current Arete Wealth Management, LLC (Arete Wealth) broker Alvery Bartlett (Bartlett) has been subject to three customer complaints. According to a BrokerCheck report many of the complaints concern alternative investments, private placements, and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs) and oil and gas programs. The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.
In March 2018 a customer filed a complaint alleging that the investments purchased between 2003 and 2011 were unsuitable and were misrepresented to him. The client also alleged that the firm failed to conduct adequate due diligence on the investments and failed to supervise the representative. The claim is currently pending and alleges damages of $6,637,918.
Our firm often handles cases involving direct participation products, Non-Traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These products are almost always unsuitable for investors. In addition, the brokers who sell them are paid additional commission in order to hype inferior quality investments which provides a perverse incentives by brokers to create an artificial market for products that no honest advisor would sell.
According to studies, non-traded REITs have historically have under performed even safe benchmarks, like U.S. treasury bonds – meaning that non-traded REITs provide paltry investment returns considering the risk an investor takes. Alternative investment products like oil and gas partnerships, REITs, and equipment leasing programs are rarely, if ever, appropriate for investors due to their high costs, illiquidity, high risks, and huge redemption charges of the products, if they can be redeemed at all. Investors often fail to understand that they have lost money until many years after agreeing to the investment.
Unfortunately, due to the high commissions brokers earn on these products they sell them to investors who cannot profit from them. These products have become so popular among brokers without providing any benefit to investors that many states now limit investors from investing more than 10% of their liquid assets in Non-Traded REITs. Many states impose these limitations because its understood that that they provide virtually no benefit to investors in relationship to their risks.
In addition, the number of disclosures with respect to Bartlett is high relative to his peers. According to newsources, only about 7.3% of financial advisors have any type of disclosure event on their records among brokers employed from 2005 to 2015. Brokers must publicly disclose reportable events on their CRD customer complaints, IRS tax liens, judgments, investigations, and even criminal matters. However, studies have found that there are fraud hotspots such as certain parts of California, New York or Florida, where the rates of disclosure can reach 18% or higher. Moreover, according to the New York Times, BrokerCheck may be becoming increasing inaccurate and understate broker misconduct as studies have shown that 96.9% of broker requests to clean their records of complaints are granted.
Bartlett entered the securities industry in 1981. From 1992 until August 2016 Bartlett was associated with Berthel, Fisher & Company Financial Serives, Inc. Since August 2016 Bartlett has been registered with Arrete Wealth out of the firm’s Clayton, Missouri office location.
At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.