The law firm of Oakes & Fosher is currently investigating the possible misconduct of former securities broker Dennis Van Patter. According to his publicly available FINRA BrokerCheck report, Dennis Van Patter has been the subject of multiple customer complaints over the course of his career.
Dennis Van Patter was a Texas based securities broker. He worked in the securities industry for thirty years. During his career, he was registered with four different securities firms.
His Registrations
- NWNL Management Corporation (1985-1986)
- Anchor National Financial Services (1986-1989)
- Dominion Capital Corporation (1990-1997)
- VSR Financial Services (1997-2016)
The Allegations
- In August 2012, a customer alleged that Dennis Van Patter recommended unsuitable investments. This case was settled for $50,000 in damages.
- In May 2014, a customer alleged misrepresentation, breach of fiduciary duty, and negligence. This case was settled for $215,000 in damages.
- In June 2015, a customer alleged that Dennis Van Patter made unsuitable investments, violated common law, negligently misrepresented the details of their account, and breached his fiduciary duty. The alleged transgressions taking place between May 2006 and January 2012. This case was settled for $40,000 in damages.
- Dennis Van Patter was sanctioned by FINRA in November 2015. This findings in this matter state that he recommended to a retired customer that they invest $1,614,000 in alternative investments that included non-traded REITs, note programs, oil and gas drilling partnerships, and other private placements. These types of securities are meant for sophisticated investors that understand the highly speculative nature of the investments; however, the customer in question had investment objectives and risk tolerances that was vastly contrary to these privately traded securities. Due to these alleged actions, he was fined $10,000 and suspended from acting as a securities broker in any fashion for a period of forty-five days.
- In January 2016, a customer alleged unsuitability, breach of fiduciary duty, and violation of Texas securities laws. This case is currently pending.
- In October 2016, a customer alleged unsuitability and over-concentration. This case is currently pending. The customer is seeking $1,074,858 in damages.
- Also in October 2016, an attorney on behalf of a customer alleged that Dennis Van Patter heavily concentrated the customer’s account in investments that were unsuitable, speculative, and illiquid. This case is currently pending. The customer is seeking an undisclosed amount in damages.
What Are Private Placements?
Private placements are privately traded securities that are not traded on any public securities exchanges. Because they are privately traded, there is great potential for oversight when dealing with these products. Many securities brokers, like Dennis Van Patter, take advantage of this potential for oversight to misrepresent key details of private placements when pitching them to investors.
The simple truth about these products is that they are speculative and high risk. So much so that they are automatically unsuitable for any investor that is not seen as an “accredited” investor. An accredited investor is an individual with a net worth of at least $1 million, or someone with an annual income of at least $200,000.
Private placements are also incredibly illiquid due to their private nature. Since they are not publicly traded, the stated market value of the security does not always equate to the amount an investor could receive should the need to liquidate their shares arise.
Despite the risks and the illiquidity, private placements continue to be sold by securities brokers like Dennis Van Patter. This is because of the incredibly high commissions that securities brokers receive when executing private placement transactions. These commissions are so detrimental to investors due to how significantly they lower their principal investment. When a principal investment is lowered to the extent that it is when purchasing a private placement, it becomes almost impossible for the investor to see a profit under anything besides booming market conditions.
For all these reasons, and more, private placements are highly unsuitable for unsophisticated investors. Investors who believe they have lost money due to their securities broker investing them in an unsuitable private placement may be entitled to damages.
Oakes & Fosher Can Help
Many investors are unaware of the legal recourse available to them after losing money due to securities broker negligence and/or fraud. Oakes & Fosher dedicates its entire legal practice to helping investors who have lost money in this fashion. If you, or someone you know, have lost money investing with Dennis Van Patter, please contact Oakes & Fosher for a free and private consultation.
