Broker Brian Roth Has Alternative Investment Customer Complaints

shutterstock_173509961-300x200Advisor Brian Roth (Roth), currently employed by brokerage firm Newbridge Securities Corporation (Newbridge Securities) has been subject to at least nine disclosures including four customer complaints, one regulatory action, and four judgement or liens.  According to a BrokerCheck report some of the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements.  The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products and have recovered in excess of $50 million in investor losses.

In June 2022 a customer complained that Roth violated the securities laws by alleging that Roth made recommendations that violated rules such as suitability, negligence, fraud, failure to supervise, violation FINRA rule 2010, and breach of contract. The claim is currently pending and the investor seeks $1,500,000 in damages.

In April 2020 a customer complained that Roth violated the securities laws by alleging that Roth made recommendations that violated rules such as breach of fiduciary duty, negligence, failure to supervise, violation FINRA rules, and breach of contract. The claim is currently settled for $100,000.

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.

Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat 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.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client after conducting due diligence.  Due diligence includes an investigation into the investment’s properties including its benefits, risks, tax consequences, issuer, history, and other relevant factors.  Appropriate due diligence would identify that an alternative investment’s high costs, illiquidity, and conflicts of interests that would make the investment not suitable for investors.  Investors 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.

Unfortunately, these types of alternative investment products continue to popular among brokers due to their high commissions.  In order to counter the perverse incentives to sell these flawed product 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 these investments do not benefit investors.

Roth entered the securities industry in 2003.  From June 2013 until August 2018 Roth was registered with International Assets Advisory.  Since February 2019 Roth has been registered with Newbridge Securities out of the firm’s Morristown, New Jersey 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.

Contact Information