NAPLES, Fla., April 26, 2016, /PRNewswire/ — Today, Vernon Litigation Group and Kristian Kraszewski filed a FINRA arbitration claim on behalf of an 88-year old gentleman who left school in the 10th grade and built a financial foundation for himself and his family through a career as a commercial fisherman. The claim relates to activities of financial professionals National Planning Corporation (“NPC”) and Christopher P. Jordan in handling his investments. The claim alleges that the 88-year old client was sold an Allianz variable annuity, FS Investments private placement, and a KBS non-traded REIT. According to Claimant’s attorney, Chris Vernon, “these are the kinds of products that typically require a salesperson and a high commission incentive to sell because of their illiquidity, complexity, high expenses, and, often, very high risks.” More detail on some of the problems with these types of investments is outlined below.
PRIVATE PLACEMENTS AND REAL ESTATE INVESTMENT TRUSTS (REITS)
Due to the problems inherent in non-traded REITS and other Private Placements on the market, securities regulators such as FINRA require brokerage firms to conduct adequate due diligence to understand the features of the product; perform a reasonable-basis suitability analysis; perform customer-specific suitability analysis in connection with any recommended transactions; provide a balanced disclosure of both the risks and rewards associated with the particular product; implement appropriate internal controls; and train registered persons regarding the features, risks, and suitability of these products. The claim against NPC asserts that these requirements were not carried out as required.
Variable annuities are designed to be long-term investments, requiring the payment of surrender charges if the investor chooses or needs to liquidate in the early years. Variable annuities are also expensive in that they include mortality and expense charges, administrative charges, and investment advisory fees. In Florida, duties of the insurance company and salesperson include reasonable grounds for believing that the recommendation is suitable for the consumer, based on a number of factors, including a reasonable basis to believe the consumer would benefit from tax-deferred growth. This is why variable annuities can be especially inappropriate for older investors. The claim against NPC asserts industry standards and regulatory and legal requirements were not followed with respect to the sale of the variable annuity.
The attorneys at Vernon Litigation Group have decades of experience representing investors across the country who have suffered considerable losses from alternative investments such as Hedge Funds, Private Placements, Non-traded REITs, and Structured Products. As veterans of many investment-related claims and cases, the attorneys of Vernon Litigation Group recommend that you contact them if you are concerned about your investments or the way you have been treated by your financial professional. Call Vernon Litigation Group toll free at (239) 319-4434 or by e-mail at mailto:email@example.com today if you believe you have significant damages relating to your investments due to the incompetence or unethical actions of your financial professional.
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