The Financial Industry Regulatory Authority (FINRA) recently fined broker-dealer firm Berthel Fisher & Company Financial Services, Inc. (Berthel Fisher) and its affiliate, Securities Management & Research, Inc. (Securities Management) $775,000 for supervisory deficiencies. This came as Berthel Fisher and Securities Management failed to supervise sales of non-traded real estate investment trusts (REITs) and leveraged and inverse exchange-traded funds (ETFs) by their registered representatives.
The questionable sales activity took place from January 2008 to December 2012. FINRA discovered that the firms did not have adequate supervisory systems and written procedures in place for sales of the following alternative investment products: non-traded REITs, managed futures, oil and gas programs, equipment leasing programs and business development companies.
In some instances, the firms also failed to either accurately calculate concentration levels for these investments or correctly enforce suitability standards.
Additional questions arose around the sales of leverage and inverse ETFs during the period of April 2009 to April 2012. According to FINRA, Berthel Fisher did not have a “reasonable basis” for certain investment sales and it also did not “adequately” research or review non-traditional ETFs before allowing its registered representatives to make customer recommendations.
Blau & Malmfeldt invites Berthel Fisher customers to contact us at 312-443-1600 for a complimentary case evaluation. Blau & Malmfeldt is a law firm that represents investors across the United States in securities, commodity futures, partnership and shareholder rights disputes.