William Charles Burks II, a registered broker formerly affiliated with multiple firms, has been fined $10,000 and suspended for four months by FINRA for recommending unsuitable concentrations of illiquid alternative investments to retail clients. The sanctions, which took effect on September 15, 2025, highlight ongoing concerns about how some advisors place elderly and conservative investors into complex products that do not match their stated risk tolerance. Burks worked at insurance broker-dealers where captive agents often face intense pressure to sell proprietary or affiliated alternative products that generate higher commissions than traditional mutual funds or municipal bonds.
What the FINRA action says
FINRA determined that Burks, who holds CRD number 2944992, recommended excessive allocations to non-traded REITs, business development companies, and interval funds. These products are illiquid, difficult to value, and carry high fee structures that erode principal over time. Burks’s customers included retirees who had indicated a low risk tolerance and a primary objective of capital preservation. FINRA Rule 2111 requires brokers to have a reasonable basis for recommending an investment based on the customer’s profile, and Burks allegedly violated this standard across multiple accounts.
The regulator found that Burks failed to conduct reasonable diligence on the products he recommended. He also failed to consider whether the high concentrations he built in client accounts were consistent with their investment profiles. When a broker builds a portfolio where 30, 40, or 50 percent of a retiree’s liquid net worth is tied up in non-traded products, the customer is exposed to catastrophic liquidity risk if a personal emergency or market event forces a need for cash.
| Sanction | Detail |
|---|---|
| Broker | William Charles Burks II (CRD #2944992) |
| Fine | $10,000 |
| Suspension | 4 months (Sept 15, 2025 – Jan 14, 2026) |
| Violation | FINRA Rule 2111 (suitability) |
| Products | Non-traded REITs, BDCs, interval funds |
Why illiquid alternatives are dangerous for retirees
Non-traded REITs and BDCs are often marketed to income investors as yield-generating vehicles that provide steady cash flow without the volatility of public markets. What brochures rarely emphasize is the lack of liquidity, opaque valuations, and high upfront fees that can consume 10 percent or more of invested capital before a single dollar is deployed. When a broker overconcentrates a retiree’s account in these products, the result can be catastrophic. A 70-year-old widow with $400,000 in savings who puts $150,000 into a non-traded REIT may find that she cannot access that money for five to seven years, regardless of medical bills or emergency needs.
Unlike publicly traded REITs, non-traded REITs do not have a daily market price. Redemptions are often limited, suspended, or subject to heavy penalties. Business development companies carry credit risk and leverage that many conservative investors do not understand. Interval funds offer quarterly liquidity windows that may not be sufficient during a market stress event. Burks’s clients were exposed to all of these risks simultaneously, in some cases without adequate disclosure or informed consent.
FINRA has been intensifying its scrutiny of illiquid alternative sales over the past two years. In 2025 alone, the regulator ordered more than $16 million in restitution related to unsuitable alternative investment recommendations. Burks’s suspension is part of that broader enforcement trend, and it sends a signal that individual brokers will be held personally accountable for the damage they cause.
Red flags that should have been caught
Firms have a supervisory obligation to monitor concentration levels and product suitability. In this case, the customer account records showed risk tolerances that were fundamentally incompatible with illiquid alternative products. A properly functioning compliance system would have flagged these allocations before they reached 20, 30, or 50 percent of account value. Registered Principal review of new account applications should have triggered escalation when retirees over 65 were funneled into concentration strategies built around non-traded products.
Other warning signs include clients over age 70 with concentrated positions in non-traded vehicles, accounts with unusually high turnover of alternative products before the recommended holding period, and discrepancies between stated investment objectives and actual holdings. When a firm ignores these signals, investors pay the price. Burks’s employer at the time of the misconduct had a duty to train, supervise, and audit the recommendations its brokers made. FINRA’s action does not name the firm, but the supervisory failures were evident.
What affected investors can do now
Investors who suffered losses due to unsuitable concentrations in non-traded REITs, BDCs, or interval funds may have a path to recovery through FINRA arbitration. Arbitration does not require going to court and typically resolves faster than traditional litigation. Investors should gather their account statements, trade confirmations, new account documents, and any correspondence with the broker or firm. The new account form, which describes risk tolerance and investment objectives, is often the most important piece of evidence.
The statute of limitations for FINRA arbitration claims is generally six years from the event or two years from discovery. However, waiting weakens a claim and reduces recoverable damages. Witnesses move, documents are lost, and firm records deteriorate over time. Investors who suspect misconduct should act promptly to preserve their rights and begin the claims process.
Haselkorn & Thibaut fights for investor recovery
Haselkorn & Thibaut is a securities law firm founded by former Wall Street defense attorneys who shifted their practice to represent investors. The firm has recovered over $520 million for clients in securities matters and maintains a 98 percent success rate in resolved nontraded REIT cases. Attorneys are AV Preeminent rated through Martindale-Hubbell, designated as Super Lawyers, and hold a 5.0-star client review average. The firm operates on a contingency basis — no recovery, no fee.
Contact Haselkorn & Thibaut today
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Disclaimer: The information provided is for educational purposes only and does not constitute legal advice.
