Grossly negligent behavior, breach of fiduciary duty, misrepresentations and omissions, securities, and unsuitable investment recommendations are the charges leveled against LPL Financial and Tamber King Proctor, a former broker at the firm, by a Mississippi retiree.
The claimant has filed a Financial Industry Regulatory Authority (FINRA) arbitration claim, seeking damages of up to $100K on grounds that Northstar Healthcare REIT and FS Energy and Power Fund, a business development company (BDC), should never have been recommended as investment options on account of their incompatibility with his investments goals and risk profile.
The older investor is being represented by the Mississippi investment fraud lawyers in this case of broker-dealer negligence.
It has been claimed by the investor that he entrusted his savings to LPL Financial hoping for modest returns. As an inexperienced investor, he did not wish to take on too much risk and was assured of the safety of his investments.
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What actually happened was different. His account was concentrated in the FS Energy and Power Fund, a non-traded BDC that invests in equity and debt of private power and energy companies. The FS Energy and Power Fund can be safely classified as a highly unsuitable investment recommendation for this retiree.
Sure enough, in March, suspension of investor distributions was announced by the FS Energy and Power Fund, leading to a sharp drop in its share price as well as the average YTD return.
To compound the issue, Proctor and LPL Financial also recommended Northstar Healthcare REIT, a non-traded real estate investment trust, yet another unsuitable asset for this retiree’s portfolio.
For the record, the investors of Northstar Healthcare REIT have not been receiving income distribution for quite some time. It is also common knowledge that the non-traded REIT has sustained significant losses. Known to be a volatile and risky investment, it was strange that LPL and it’s then representative recommended it to this client.
There are many other investors of Northstar Healthcare REIT who have claimed that they were sold this REIT as a safe and profitable investment with a likelihood of going public. Even if it is being said with the benefit of hindsight, that has not been the case. This was clearly an investment for the consideration of investors with a high-risk appetite. Unfortunately, it is the retail investors and retirees now left holding the Northstar Healthcare REIT baby in their portfolios.
Though he had joined Securities America as a broker after leaving LPL, Proctor is currently not a registered broker with any brokerage firm. He does, however, continue to be a registered investment advisor for Proctor Investments and Insurance, in Waynesboro, MS.