FINRA Panel Awarded Investors More than $1M for Sales or REITS and Other Complex Products
In a case that points up many of the problems that have been plaguing the securities industry for years, a FINRA panel of arbitrators awarded six investors more than $1M in relief after they alleged that a financial advisor and three executives for Berthel Fisher & Co sold them unsuitable complex products.
The panel found that the Berthel executives, Thomas Berthel, Ronald Brendengen, and Maurice Maurice — along with broker Jerry McCutchen, Senior, were liable for damages related to the inappropriate sales of REITs, equipment leases, and direct participation programs. These are some of the more complex and illiquid investments on the market, and according to the filings the Berthel team foisted them upon their investors in a big for higher fees.
Rogue Broker Lead the Charge to Sell Investors Unsuitable Complex Products
The Berthel financial advisor involved in the proceedings, Mr. McCutchen, worked at the firm from 2007 until 2014. According to his BrokerCheck profile, he was barred from the industry by FINRA after 27 years working at ten different firms, during which time he had accumulated 43 disciplinary disclosures. The deals Mr. McCutchen sold clients for Berthel, which included equipment leases, DPPs, and REITS, were done from his based in Mobile, Alabama.
Mr. McCutchen and Berthel perfectly fit the description of the types of “rogue brokers” that FINRA is trying desperately to regulate more heavily. In recent news, the securities industry watchdog has floated the idea of having high-risk brokerages and brokers with checkered backgrounds be forced to pay into a victims compensation fund. That is because, in many cases, firms like Berthel and brokers like McCutchen, who has a history of injuring investors, will often be unable to pay any awards even if arbitration panels find against them.