The law offices of Gana LLP are investigating a series of claims before The Financial Industry Regulatory Authority (FINRA) in relation to the conduct of financial advisor Robert Smith (Smith). Smith has been accused by at least 10 customers over his career concerning allegations that Smith overconcentrated the customer’s accounts in private placement securities including equipment leasing programs, oil & gas investments, and non-traded real estate investment trusts (Non-traded REITs).
Smith has been registered with several broker dealers over the years. Starting in 2000 Smith was registered with American General Securities (n/k/a SagePoint Financial, Inc.) until May 2006. Thereafter, Smith was associated with ProEquities, Inc. until June 2010. Finally, from June 2010, until June 2014, Smith was registered with Berthel, Fisher & Company Financial Services, Inc. (Berthel Fisher). Currently, Smith is not registered with any FINRA firm. Upon information and belief, from 2006 on Smith operated his securities business under a DBA called Proactive Retirement Investing.
The large number of complaints against Smith concerning the same or similar charges of misconduct is unusual in the brokerage industry. Most brokers go their entire careers without a single complaint. A small number have one or two complaints. But only a tiny percentage have more than two customer complaints. Here, at least 10 customers have made allegations against Smith all concerning difficult to value private placement securities.
The types of products Smith recommended do immediately appear to be inappropriate to the investor. In oil & gas, Non-Traded REIT, and equipment leasing programs the investor often receives a stream of income for a number of years, maybe as much as 5 to 7 years before something goes wrong. All of sudden the income stops or the interest payments are lowered substantially. Only then does the investor learn that product is not expected to return the investor’s principal for a variety of reasons depending upon the product. These income paying securities lull investors into a false sense of security because they initially receive a stream of income and belief the investments are viable.