Broker Christopher Scalese Has Multiple Complaints Over ICON Leasing and Non-Traded REITs

shutterstock_113872627-300x300The investment fraud attorneys with Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Christopher Scalese (Scalese) currently not associated with any broker-dealer alleging unsuitable investments, misrepresentations and omissions of material information among other claims.  According to brokercheck records Scalese has been subject to nine customer complaints.  Many of the complaints involve direct participation products (DPPs) such as non-traded real estate investment trusts (REITs), equipment leasing funds – such as LEAF or ICON, and other alternative investments.

In January 2017 a customer filed a complaint alleging unsuitable investments, misrepresentation, and other causes of action in connection with the sale of various REITS and an equipment leasing fund.  The customer claimed damages of $1,326,000.  The claim is currently pending.

Our firm has represented many clients in illiquid alternative investments products.  All of these investments come with high costs and have historically underperformed even safe benchmarks, like U.S. treasury bonds.  For example, products like oil and gas partnerships, REITs, and other alternative investments are only appropriate for a narrow band of investors under certain conditions due to the high costs, illiquidity, and huge redemption charges of the products, if they can be redeemed at all.  However, due to the high commissions brokers earn on these products they sell them to investors who cannot profit from them and have created a large market for a failed product.  Further, investor often fail to understand that they have lost money in these illiquid investments until many years after investing.  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.

Scalese entered the securities industry in 1998.  From April 2006 through March 2010, Scalese was registered with NFP Securities, Inc.  Finally, from March 2010 until November 2012, Scalese was associated with Summit Brokerage Services, Inc. out of the firm’s Dunmore, Pennsylvania office location.

The number of events listed on Scalese brokercheck is high relative to his peers.  According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records.  Brokers must publicly disclose certain types of reportable events on their CRD including but not limited to customer complaints.  In addition to disclosing client disputes brokers must divulge IRS tax liens, judgments, and criminal matters.  However, FINRA’s records are not always complete according to a Wall Street Journal story that checked with 26 state regulators and found that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on BrokerCheck.  More disturbing is the fact that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.

Gana LLP’s securities fraud attorneys represent investors who have suffered securities losses due to the mishandling of their accounts in alternative investments and other inappropriate assets.  The majority of these claims may be brought in securities arbitration before FINRA.  Our consultations are free of charge and the firm is only compensated if you recover.