Securities Lawyers Blog
Many investors who have lost money with a broker at Purshe Kaplan Sterling Investments wonder whether they can recover their investment losses and how long they have to act. The securities arbitration attorneys at Gana Weinstein LLP represent investors in FINRA arbitration, the forum where most claims against brokerage firms and stockbrokers are decided. Our attorneys can explain the FINRA arbitration process, the time limits that apply to your claim, and the damages that may be recovered.
Purshe Kaplan Sterling Investments is an independent broker-dealer that provides brokerage, wealth management and investment advisory support to independent financial professionals, including access to alternative investments. Formed in New York in 1993 and headquartered in Albany, the firm supports a large national network of branch offices and was acquired by holding company Wentworth Management Services in 2017.
Purshe Kaplan Sterling Investments – By the Numbers:
- CRD #: 35747
- Regulatory Events: 11
- Arbitration Events: 2
- Broker Employees: 1,437
Purshe Kaplan Sterling Investments – In the News:
FINRA v. Purshe Kaplan Sterling Investments (Case #2018060896301) – Between May 4, 2018, and June 29, 2018, PKS negligently failed to tell three investors in offerings related to GPB Capital Holdings, LLC (GPB Capital) that the issuers failed to timely make required filings with the Securities and Exchange Commission, including filing audited financial statements. By virtue of the foregoing, PKS violated FINRA Rule 2010.
FINRA v. Purshe Kaplan Sterling Investments (Case #2014042291901) – From at least June 2011 through January 2015, Respondent Gopi Vungarala, through his firm, Respondent PKS, regularly lied to his customer, ST, a Native American tribe, regarding investments he recommended. In addition to serving as ST’s PKS registered representative, Vungarala was employed by the tribe as its Treasury Investment Manager and participated in decisions regarding the tribe’s investments. Vungarala fraudulently induced the tribe to invest hundreds of millions of dollars in non-traded real estate investment trusts (“REITs”) and business development companies (“BDCs”), without revealing he and his firm received commissions on the sales (usually seven percent) or the availability of certain volume discounts. PKS’s supervisory failures led it to fail to detect and prevent Vungarala’s fraud. Vungarala knew that ST prohibited its employees, such as himself, from engaging in business activities that could constitute a conflict of interest with the tribe, or that could impair an employee’s ability to make impartial decisions on behalf of the tribe. Notwithstanding these prohibitions, and knowing that tribal leaders relied upon his recommendations as Treasury Investment Manager, Vungarala recommended the tribe invest more than $190 million in non-traded REITs and BDCs over the course of three years, generating $11.4 million in commissions for PKS, $9.6 million of which was paid to Vungarala. In order to induce the tribe to make these purchases, notwithstanding the tribe’s prohibitions against conflicts of interests, Vungarala falsely represented to ST that he would not receive any commissions on purchases of the non-traded REITs and BDCs made in the tribe’s PKS accounts. Vungarala also allowed tribal leaders to believe PKS would not receive any commissions on these transactions, either, when he knew or should have known that this was their understanding. Vungarala was also aware of, but failed to disclose to ST, that the tribe was eligible to receive volume discounts on its non-traded REIT/BDC purchases based upon the fact that multiple trust accounts owned by ST purchased the same offerings through PKS. As a result, the tribe failed to receive more than $3.3 million in volume discounts to which it was eligible. All of these funds, instead, went to PKS and Vungarala in the form of commissions to the detriment of ST. PKS’s supervisory failures prevented it from detecting and halting Vungarala’s fraudulent conduct. First, at the time ST became a PKS customer in July 2011, PKS failed to perform an adequate review of Vungarala’s dual relationship with ST to determine whether this relationship heightened the risk of fraudulent conduct by Vungarala toward the tribe. Because it failed to conduct an adequate review of the risks inherent to Vungarala’s dual relationship with the tribe, PKS likewise failed to establish sufficient procedures to mitigate any such risks.
Gana Weinstein LLP represents investors in disputes over stock market investment losses, unsuitable investments, and failure to supervise at firms across the country, including customers of Purshe Kaplan Sterling Investments. Call us for a free consultation and a candid assessment of your claim.