Securities Lawyers Blog
Advisor Conrad Corcoran (Corcoran), currently employed by brokerage firm Centaurus Financial, Inc. has been subject to at least four customer complaints during the course of his career. According to a BrokerCheck report the two most recent customer complaints filed in 2020 concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.
In July 2020 a customer complained that Corcoran violated the securities laws by alleging that Corcoran made investments where the documentation for their investments contained incorrect personal information and that certain initials/signatures were not theirs. The claim involves a real estate security, alleged damages, and is currently pending.
DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.
Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat safe benchmarks, like U.S. treasury bonds. Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do. Because investors are not compensated with additional return in exchange for higher risk and illiquidity, these kinds of alternative investment products are rarely, if ever, appropriate for investors. Continue Reading