Securities Lawyers Blog
Advisor Mercer Hicks (Hicks), currently employed by Southeast Investments, N.C., Inc. (Southeast Investments) has been subject to at least five liens, three employment terminations for cause, and one regulatory complaint 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), oil & gas programs, annuities, and equipment leasing programs. The attorneys at Gana Weinstein LLP have represented dozens of investors who suffered losses caused by these types of high risk, low reward products.
In December 2019 Hicks was named a respondent in a FINRA complaint alleging that he recommended unsuitable investments to five senior customers to purchase speculative REITs and non-traded business development companies (BDCs). FINRA alleges that the prospectuses and subscription agreements for these non-traded REITs and non-traded BDCs stated that investing in these securities involved a high degree of risk, was speculative, was not suitable for persons who require immediate liquidity, guaranteed income, or seek short-term investments, and was only appropriate for those investors who could afford a complete loss of their investments.
FINRA claims that the five senior customers at issue were not seeking to make speculative, high-risk investments. The customers’ account documents indicated that they were seeking to preserve their capital or capital appreciation. In addition, FINRA claims that some of these customers have encountered difficulties liquidating the investments to obtain funds that they needed to pay for medical care. FINRA alleged that Hicks recommended purchases of unsuitable non-traded REITs and non-traded BDCs to the five senior customers totaling approximately $665,000 while Hicks received a seven percent commission from each sale totaling $46,550.