Securities Lawyers Blog
Advisor Robert Burns (Burns), currently employed by Cetera Advisor Networks LLC (Cetera Advisor) has been subject to at least two customer complaints during the course of his career. According to a BrokerCheck report the customer complaints concerns alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs. The attorneys at Gana Weinstein LLP have represented dozens of investors who suffered losses caused by these types of high risk, low reward products.
Burns’ customers complain that they lost money investing in products such as Penneco 10, Carter Validus, GMI, Cypress, KBS REIT, Resource Real Estate, and UDF IV. UDF has been accused of being an investment fraud scheme.
In August 2019 a customer complained that Burns violated the securities laws by alleging that Burns recommended an overconcentration and unsuitable investments in alternative products and alleged the firm failed to do due diligence of the alternative investments. The claim alleges $500,000 in damages and is currently pending.
In August 2018 a customer complained that Burns violated the securities laws by alleging that Burns recommended unsuitable investments in alternative products. The claim settled for $150,000.
DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.
According to studies, non-traded REITs have historically have underperformed even safe benchmarks, like U.S. treasury bonds. Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do. 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. In addition, these products often continue to deceive investors for years through their control over their own prices, returning investor capital as a false distribution from operations, high fees on their redemption programs, and control of pertinent investor information. Investors often fail to understand that they have lost money until many years after agreeing to the investment in these products.
These types of alternative investment products have become so popular among brokers without providing any benefit to investors that 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 no rational person can come up with an argument to support the continued sale of these products. Unfortunately for investors there is no regulatory authority in the United States with the ability to analyze investments in order to ban flawed investment products.
Burns entered the securities industry in 2000. From October 2009 until November 2016 Burns was registered with VSR Financial Services, Inc. From September 2016 until September 2019 Burns was associated with Summit Brokerage Services, Inc. Finally, since September 2019 Burns has been registered with Cetera Advisors out of the firm’s Greenwood Village, Colorado office location.
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.