Susan Welo Sanctioned By the State of North Dakota Over Securities Advice

shutterstock_112866430-300x199Former Cetera Advisor Networks LLC (Cetera) broker Susan Welo (Welo) has been subject to nine customer complaints, one employment separation for cause, and one regulatory action.  According to a BrokerCheck report Welo was terminated by Cetera after the firm alleged that Welo failed to disclose to firm that Welo provided a loan to a client while at a prior broker-dealer. In addition, Cetera claimed that Welo violated firm policies by accepting blank signed forms from clients and permitting assistant to sign representative’s name to various documents.

In addition, the State of North Dakota alleged that Welo acted as an unregistered securities agent by handling client funds and make investment recommendations.

Many of the complaints concern alternative investments, private placements, and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs).  Our firm has experience handling investor losses caused by these products.

All of these investments come with high costs and historically have 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.  However, due to the high commissions brokers earn on these products they sell them to investors who cannot profit from them.  Further, investor 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.

In addition, the number of disclosures with respect to Welo is high relative to his peers.  According to newsources, only about 7.3% of financial advisors have any type of disclosure event on their records among brokers employed from 2005 to 2015.  Brokers must publicly disclose reportable events on their CRD customer complaints, IRS tax liens, judgments, investigations, and even criminal matters.  However, studies have found that there are fraud hotspots such as certain parts of California, New York or Florida, where the rates of disclosure can reach 18% or higher.  Moreover, according to the New York Times, BrokerCheck may be becoming increasing inaccurate and understate broker misconduct as studies have shown that 96.9% of broker requests to clean their records of complaints are granted.

Welo entered the securities industry in 1988.  From October 2009 until February 2015 Welo was associated with Securities America, Inc.  Finally, from February 2015 until October 2016 Welo was associated with Cetera out of the firm’s Mayville, North Dakota office location.

At Gana 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.