The law firm of Oakes & Fosher is presently investigating the alleged misconduct of securities broker Enrique Lopez. According to his publicly available FINRA BrokerCheck report, Enrique Lopez has been the subject of multiple customer disputes over the course of his career.
Enrique Lopez is a Texas based securities broker. He has worked in the securities industry for twenty-two years. During his career, he has been registered with six different securities firms.
His Registrations
- H.D. Vest Investment Securities (1994-1995)
- Edward D. Jones & Co. (1995-1996)
- Merrill Lynch (1999-2003)
- Raymond James Financial Services (2003-2008)
- LPL Financial (2008-2018)
- Arkadios (2018-Present)
The Allegations
- In April 2017, a customer alleged that Enrique Lopez breached contract, violated Texas State Securities Statutes, violated the Texas Business and Commerce Codes, violated consumer protection statutes, made negligent misrepresentations, engaged in unjust enrichment, breached duties, made unsuitable investment recommendations, and violated FINRA rules. This case went to arbitration where the customer was awarded over $1.5 million in damages.
- In June 2019, customers alleged that Enrique Lopez made material misrepresentations while recommending highly speculative real estate investment trusts. The customers also alleged that Lopez recommended a highly unsuitable annuity switch. This case is currently pending. The customers are seeking $2 million in damages.
- In January 2020, another customer alleged that Enrique Lopez recommended highly unsuitable non-traded REITs. This case is currently pending. The customer is seeking an undisclosed amount in damages.
Non-Traded REITs
Non-traded real estate investment trusts, or non-traded REITs, are an alternative type of investment not traded on any public securities exchanges. Their private nature leads to a significant lack of oversight that often leads to these products being recommended to financially unsuited investors. The truth is that non-traded REITs are incredibly speculative and illiquid investments that are very rarely suitable for investors. Their associated risk is a direct result of the nature of what they do. These private investment funds usually make their money by purchasing real estate and then collecting income through rent being paid or through mortgages. However, these trusts only operate for a finite amount of time before they are liquidated. Unlike publicly traded companies, which have long term objectives, non-traded REITs are expected to form a profitable real estate business in their brief operations period. A company like this being successful is not something that investors should bank on.
The illiquidity associated with these investments is also a major problem. Since these trusts operate for only a brief time, those managing these companies want to hang onto cash infused to fund operations. Because of this, it is incredibly difficult to liquidate shares of a non-traded REIT before the company’s liquidation phase. If an investor is forced to withdraw before this time, they often have to accept a buy out price that is substantially less than what they are told the shares are currently valued at. If the non-traded REIT is declining in value, then the investor has two choices. They can withdraw funds while taking a serious hit, or they can wait to see if the value rises again. However, if this does not occur, it is very possible that an investor’s shares can be completely worthless by the time the non-traded REIT reaches its liquidation phase.
Non-traded REITs are also accompanied by significant up front fees. Brokers who recommend these products can receive commissions as high as ten percent of the investor’s principal investment–simply for brokering the trade. These commissions compounded with other upfront fees can drain an investor’s principal of as much as 17 percent. When a customer’s investment is lowered that substantially at the start, it becomes impossible for them to see any investment returns under anything other than a booming marketplace. These excessively high broker commissions prove to be the main reason that these products are recommended in the first place. They create significant conflicts of interest that lead to these products being recommended to investors that are woefully unsuited for them.
Oakes & Fosher Can Help
Many investors are unaware of the legal recourse available to them after losing money due to securities broker fraud and/or negligence. The truth is that investors who have lost money in this fashion may actually be entitled to damages.
Oakes & Fsoher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with Enrique Lopez, please contact Oakes & Fosher for a free and private consultation. We handle cases on a contingency basis, which means there are no fees charged unless we collect for you.
