Currently financial advisor Timothy Evans (Evans), currently employed by brokerage firm IBN Financial Services, Inc. has been subject to at least 2 disclosable events. These events include one customer complaint, one tax lien. According to a BrokerCheck reports most of the recent customer complaints concern either corporate debt securities or 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.
FINRA BrokerCheck shows a final customer complaint on January 29, 2025.
Without admitting or denying the findings, Evans and his member firm consented to the sanctions and to the entry of findings that they failed to reasonably supervise a registered representative’s recommendations of alternative investments, including a non-traded real estate investment trust (REIT) to two retail customers. The findings stated that the firm and Evans failed to reasonably supervise the registered representative’s recommendations of speculative alternative investments to the retail customers where the sales were not suitable or in the best interests of the customers given the customers’ investment profiles. Evans was the representative’s direct business line supervisor and was responsible for reviewing for supervisory approval applications to purchase alternative investments submitted by the representative. In January 2019, the representative recommended five illiquid, non-traded alternative investments totaling $400,000 to the first customer. The firm and Evans approved the sales notwithstanding the presence of red flags suggesting that the sales were unsuitable. Specifically, the firm and Evans were aware from the application documents that the customer was 71 years old, retired, had a moderate risk tolerance, and had a net worth, not including primary residence, of $851,889. The firm and Evans nevertheless approved the five sales, which resulted in the customer having a 47% concentration in speculative alternative investments. Subsequently, the representative recommended 11 sales of illiquid, non-traded alternative investments totaling $457,000 to a second customer. This included $90,000 of the non-traded REIT. Again, the firm and Evans approved the sales notwithstanding the presence of red flags suggesting that the sales were not in the customer’s best interest. Specifically, IBN and Evans were aware from the application documents that the customer had an annual income of no more than $25,000, had a moderate risk tolerance, and had a net worth, not including primary residence, of $587,438. The firm and Evans nevertheless approved the sales, which resulted in the customer having a 77% concentration in speculative alternative investments, including 15% in the REIT. Despite red flags that the recommendations were unsuitable for, and not in the best interest of, respectively, the two customers, the firm and Evans did not conduct any further review or take any further steps before approving the transactions, such as evaluating whether the representative had good cause for the recommendations given the concentration levels at issue as required by the firm’s WSPs.