VSR Financial Services

Broker Kevin Nevin Sanctioned Over Alleged Sales of Private Securities Transactions

August 4, 2014 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) sanctioned broker Kevin Nevin (Nevin) concerning allegations that Nevin participated in 11 private securities transactions totaling $690,000 over the course of two years without first disclosing his participation his member firm. Through this conduct, FINRA found that Nevin violated NASD Conduct Rules 3040 and 2110.

Nevin entered the securities industry in 1994 and is currently a representative of Capital Guardian, LLC. In March 2006, Nevin became associated with VSR Financial Services (VSR) until February 2011, when he was terminated. In addition, to the recent FINRA complaint, Nevin has also been subject to three customer complaints. Some of the customer complaints concern allegations of unsuitable sales practices and securities fraud concerning variable annuities. Another customer complaint concerns the recommendation of oil & gas and real estate related private placements.

FINRA alleged that during part of the time he was registered with VSR, Nevin operated out of an office with another VSR registered representative referred to by the initials “PL.” FINRA found that PL was involved with at least three private placement offerings involving real estate and/or appurtenant property rights entities in the state of Colorado: Breakwater Capital Group, LLC; Yokam Land Holdings, LLC; and South Platte Land & Water, LLC. FINRA found that PL assured Nevin that he had informed VSR of the involvement in the Colorado water rights and real estate activity and that the private placement offerings were conducted entirely under the operations of PL’s real-estate agency. According to FINRA, PL told Nevin that he could recommend investments in these offerings to his customers and earn commissions on any ensuing investments if he obtained a real-estate license.

John Towers of VSR Financial Sanctioned Over Unsuitable Sale of Alternative Investments and Private Placement Securities

March 15, 2014 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) sanctioned financial advisor John H. Towers (Towers) of VSR Financial Services, Inc. (VSR) concerning allegations of unsuitable sales of over $6,000,000 in alternative investments including oil and gas interests, real estate investment trusts (REITs), and other speculative private placement investments to an investor. FINRA’s determinations in this matter is significant because some in financial industry take the position that wealthy customers are automatically sophisticated and therefore fair game to recommend positions in speculative private placement securities. The theory goes that if you have a lot of money then it is ok for you to lose some of it speculating in alternative investments.

Towers entered the securities industry in 1970. From 2002 until December 2013, Towers was associated with VSR. According to Towers’ BrokerCheck at least 14 customers have filed complaints against Towers. The vast majority of those complaints involve claims concerning the improper sale of various private placement securities.

FINRA alleged that in September 2005, Towers recommended that a married couple invest $25,000 in APC 2005-B, a high risk private placement. Over the next five years, FINRA found that Towers continually recommended that the couple make an additional eighty-eight investments in private placements and REITs totaling approximately $6,259,400 and representing approximately 72% of their investments purchased at VSR. FINRA alleged that the private placements and REITS were all described in the offering documents as high risk investments. FINRA also found that the couple had stated a moderate risk tolerance on their new account forms and specified that no more than 10% of their accounts were to be invested in high risk products.

VSR Financial Services, Inc. and Donald J. Beary Fined Over Alternative Investment Sales

September 23, 2013 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA), VSR Financial Services, Inc. (“VSR”), and Donald J. Beary (“Beary”) have reached a settlement concerning charges brought by the securities regulator that VSR violated customer concentration guidelines and otherwise failed to reasonably supervise its brokers in the sales of alternative investments. The settlement led to VSR paying a $550,000 fine and Beary being suspended from associating with a FINRA firm for 45 days and a $10,000 fine.

VSR is based in Overland Park, Kansas, has 211 branch offices, and employs approximately 460 registered personnel. Beary is a co-founder of VSR and is its executive vice-president, chairman of the board, and direct participation principal.

According to FINRA, from 2005 until 2010 VSR and Beary failed to adequately implement the firm’s supervisory procedures concerning concentration limits in customer accounts for alternative investments. The settlement details that VSR’s supervisory failures regarding concentration limits occurred because the firm used inaccurate statements reflecting the customer’s true concentration in alternative investments and because the firm used inaccurate risk ratings of products to increase allowable concentration levels.