Articles Tagged with David Lerner

shutterstock_175298066-300x225The law offices of Gana LLP recently filed a complaint before The Financial Industry Regulatory Authority (FINRA) on behalf of a investor against brokerage firm David Lerner Associates, Inc. (David Lerner) involving the firm’s financial advisor, Lawrence Merl (Merl) and his recommendation to invest virtually all of the widow Claimant’s savings in an oil & gas private placement – Energy 11, L.P (Energy 11).  The Claimant alleged that David Lerner failed to supervise Mr. Merl’s unsuitable recommendation and failed to conduct due diligence on the investment in Energy 11.

Energy 11 has sustained massive losses that appear to have been hidden from investors due to the fact that the sponsor of Energy 11 gets to state its own value to investors.  Recently, investors in Energy 11 received value information indicating an approximate 65% loss on the investment.  It is possible that the loss if far greater than even the drastic loss already being voluntarily reported by the fund.  Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation.

Energy 11, L.P. is a non-traded oil and gas investment.  The partnership was formed in 2013 to acquire and develop oil and natural gas properties located onshore in the United States.  Energy 11 has raised over $350 million and invested the proceeds in non-operated working interests in approximately 221 existing producing wells and approximately 247 future development locations in the Sanish field located in Mountrail County, North Dakota. Whiting Petroleum Corporation (NYSE:WLL), a publicly traded oil and gas company, operates the Partnership’s well interests in the Sanish field.

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shutterstock_836360-300x225According to BrokerCheck records financial advisor Scott Mass (Mass), currently employed by David Lerner Associates, Inc. (David Lerner) has been subject to five customer complaints.  According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Mass’ customer complaints allege that Mass made unsuitable recommendations in a variety of investments including REITs, Puerto Rico bonds, and mutual funds.

In July 2018 a customer complained that Mass violated the securities laws by recommending unsuitable investments, breach of fiduciary duty, negligence, fraud and breach of contract in connection with the sale of Puerto Rico Bonds.  The customer alleges $500,000 in damages.  The claim is currently pending.

In December 2016 a customer complained that Mass violated the securities laws by recommending unsuitable investments from June 2007 through July 2015 causing $90,000 in damages.  The claim settled for $15,000.

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shutterstock_157018310-300x200The investment attorneys at Gana Weinstein LLP are investigating various potentially unsuitable sales of oil and gas private placements.  These investments include those being underwritten and offered by David Lerner Associates, Inc. (David Lerner) – Energy 11 and Energy Resources 12.

Energy 11 was formed to enable investors to invest in oil and gas properties located onshore in the United States. The funds’ stated primary objectives are to acquire producing and non-producing oil and gas properties with development potential, and to enhance the value of those properties through drilling and other development activities.  The fund plans to after five to seven years to engage in a liquidity transaction in which they will sell properties and distribute the net sales proceeds to investors, merge with another entity or list common units on a national securities exchange.

Investors often do not understand the substantial risks of oil and gas private placements.  As reported in Reuters, when offerings by Atlas Energy LP, another issuer of oil and gas private placements were analyzed, investors only get to see 65-70% of their capital actually put to work on oil and gas projects.  Further, the returns on these projects had more in common with running profitable casinos than investments. Reuters found that slightly more than half of 43 private placements Atlas issued over the past three decades investors lost money or just broke even. While investors lost in more than half of the deals in 29 or 67% of those deals, Atlas actually out-performed their own investors.

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shutterstock_38114566Investment attorneys at Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against David Lerner (Lerner) currently associated with Network 1 Financial Securities Inc. (Network 1) alleging unsuitable investments and failure to follow instructions among other claims.  According to brokercheck records Lerner has been subject to 10 customer complaints, one regulatory sanction, one employment separation for cause, and three judgments/liens.

In July 2015, Lerner received a tax lien in the amount of $16,388.  Earlier in April 2015 Lerner was subject to another tax lien of $81,986.  A broker’s inability to handle their personal finances has also been found to be relevant in helping investors determine if they should allow the broker to handle their finances.

Brokers in the financial industry have the fundamental responsibility to treat investors fairly.  This obligation includes making only suitable investments for their client.  The suitable analysis has certain requirements that must be met before the recommendation is made.  First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence.  Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors.  Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives.  These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.

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