Articles Tagged with Joseph Sturniolo

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Recently, Joseph Sturniolo’s (Sturniolo) attorney reached out to our firm to inform us that our post on Sturniolo was inaccurate.  The post detailed that Sturniolo had been subject to at least eight customer complaints and that the many of these complaints involved the recommendation of unsuitable and misrepresented recommendations concerning tenants-in-common (TICs).

The post also detailed how TICs have virtually disappeared as an investment option because they are almost always unsuitable.  According to InvestmentNews “At the height of the TIC market in 2006, 71 sponsors raised $3.65 billion in equity from TICs and DSTs…TICs now are all but extinct because of the fallout from the credit crisis.” In fact, TICs recommendations have been a major contributor to bankrupting brokerage firms. For example, 43 of the 92 broker-dealers that sold TICs sponsored by DBSI Inc., a company whose executives were later charged with running a Ponzi scheme, a staggering 47% of firms that sold DBSI are no longer in business.

TIC investments entail significant risks. A TIC investor runs the risk of holding the property for a significant amount of time and that subsequent sales of the property may occur at a discount to the value of the real property interest. FINRA has also warned that the fees and expenses associated with TICs, including sponsor costs, can, and in our opinion, do outweigh the any potential tax benefits associated with a Section 1031 Exchange. That is, the TIC product itself may be a defective product because its costs outweigh any potential investment value or tax benefit offered to the customer.

Sturniolo’s attorney has brought it to our attention that Sturniolo has succeeded in using FINRA’s flawed expungement process system to remove five complaints from his BrokerCheck record.  Sturniolo’s “award” does not even detail how much Sturniolo’s employer paid to settle all of the claims.  As shown in Sturniolo’s expungement award Sturniolo’s sued his own employer, Geneos Wealth Management, Inc. (Geneos Wealth) for damages of $1.00 due to the placement on his record of five customer complaints.  The “hearing” that took place appears to have been perfunctory at best.  The hearing concerning five customer complaints was stretched out over a one year period of time in which the arbitrator participated in four hearing sessions on non-consecutive days.  Usually there are two hearing sessions a day – meaning in this case the five cases were heard on four half-day hearings stretched out over the course of a full year.  The total cost to Sturniolo by FINRA to expunge five customer complaints from his record was $250 – excluding any fees he privately paid his counsel.

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