Advisor Peter Maller (Maller), currently employed by Lincoln Financial Advisors Corporation (Lincoln Financial) has been subject to at least three customer complaints during the course of his career. According to a BrokerCheck report the customer complaints concern alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs) and annuities. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.
In August 2019 a customer complained that Maller violated the securities laws by alleging that Maller engaged in sales practice violations related to recommending a client to invest her life savings in an unsuitable and deceptive manner, specifically concentrating her assets in annuities and illiquid, non-publicly traded investments. The claim is currently pending.
In April 2019 a customer complained that Maller violated the securities laws by alleging that Maller engaged in sales practice violations related to recommending an investment strategy in 2013 that failed to account for tax liabilities and recommended unsuitable investments. The claim is currently pending and seeks $350,394 in damages.
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 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.
Maller entered the securities industry in 1993. Since 1993 Maller has been registered with Lincoln Financial out of the firm’s Hunt Valley, Maryland 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.