Securities Lawyers Blog
Currently financial advisor Thomas Hamlin (Hamlin), currently employed by brokerage firm Somerset Securities, Inc. has been subject to at least 9 disclosable events. These events include 9 customer complaints. According to a BrokerCheck reports most of the recent customer complaints concern either corporate debt securities or 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.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $650,000.00 on September 09, 2024.
Alleged unsuitable recommendation to purchase iCap Equities private placement. iCap Equities filed for bankruptcy on 9/12/2023.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $108,000.00 on January 29, 2024.
Alleged unsuitable recommendation to purchase iCap Equity private placement. iCap Equities filed for bankruptcy on 9/29/2023.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $168,000.00 on December 14, 2023.
Alleged unsuitable recommendation to purchase iCap Equities private placement. iCap Equities filed for bankruptcy on 9/29/2023.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $189,204.00 on December 12, 2023.
Alleged unsuitable recommendation to purchase iCap Equities private placement. ICap Equities filed for bankruptcy on 9/29/2023.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $2,000,000.00 on December 11, 2023.
Alleged unsuitable recommendation to purchase iCap Equity private placement. iCap Equity filed for bankruptcy on 9/29/2023.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $504,476.00 on December 05, 2023.
Alleged unsuitable recommendations to purchase iCap Equity private placement. iCap Equities filed for bankruptcy on 9/29/2023.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $500,000.00 on November 27, 2023.
Alleged unsuitable recommendation to purchase iCap Equity private placement. iCap Equity filed for bankruptcy on 9/29/2023.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $285,000.00 on October 09, 2023.
Alleged unsuitable recommendation to purchase iCap Equities private placement. iCap Equities filed for bankruptcy on 9/29/2023.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $355,000.00 on September 21, 2023.
Alleged unsuitable recommendation to purchase iCap Equites private placement. iCap Equities filed for bankruptcy on 9/29/2023.
Products under DDPs include non-traded REITs, oil and gas offerings, equipment leasing investments, and a range of other alternative financial instruments. These alternative investments rarely generate profits for investors and are generally unsuitable due to their excessive fees and costly structure. By offering brokers extra commissions, firms incentivize the sale of poor-quality investments, ultimately leading to a manipulated market driven by artificial demand.
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. Those selling these products must disclose to investors that non-traded REITs yield lower returns than treasuries and carry significant risk and illiquidity—yet they almost never comply. 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.
Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client after conducting due diligence. Due diligence includes an investigation into the investment’s properties including its benefits, risks, tax consequences, issuer, history, and other relevant factors. Appropriate due diligence would identify that an alternative investment’s high costs, illiquidity, and conflicts of interests that would make the investment not suitable for investors. Investors often fail to understand that they have lost money until many years after agreeing to the investment. In sum, for all of their costs and risks, investors in these programs are in no way additionally compensated for the loss of liquidity, risks, or cost.
Unfortunately, these types of alternative investment products continue to popular among brokers due to their high commissions. In order to counter the perverse incentives to sell these flawed product many states now limit investors from investing more than 10% of their liquid assets in Non-Traded REITs and BDCs. Many states impose these limitations because these investments do not benefit investors.
Hamlin entered the securities industry in 1992. Hamlin has been registered as a Broker with Somerset Securities, Inc. since 2013.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. 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.
