Securities Lawyers Blog
Advisor Roy Williams (Williams), currently employed by brokerage firm Center Street Securities, Inc. (Center Street Securities) but doing business as Williams Financial Group has been subject to at least seven customer complaints and one regulatory action during the course of his career. According to a BrokerCheck report the most recent customer complaints since 2017 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 May 2020a customer complained that Williams violated the securities laws by alleging that Williams made unsuitable investments and failed to conduct due diligence on the investments made. The claim involves alternative investments, alleges $100,000 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