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 be entitled to damages. The law firm of Oakes & Fohser is heavily interested in hearing from investors who believe this may be them.

Oakes & Fosher is currently investigating the possible misconduct of former securities broker Eric Kuchel. According to his publicly available FINRA BrokerCheck report, Eric Kuchel has been the subject of multiple customer disputes.

Eric Kuchel was a California based securities broker. He worked in the securities industry for fifteen years. During his career, he was registered with three different securities firms.

His Registrations

  • Brookstreet Securities Corporation (2000-2007)
  • Crown Capital Securities (2007-2014)
  • LPL Financial (2014-2015)

The Allegations

  • In August 2012, a customer alleged lack of suitability, breach of fiduciary duty, and misrepresentation in connection with non-traded REITs. This case went to arbitration where the customer was awarded $277,468 in damages.
  • In June 2015, customers alleged that Eric Kuchel made unsuitable investment recommendations, handled their account negligently, breached his fiduciary duty, engaged in fraud, and failed to conduct due diligence concerning the sale of five private placements. This case was settled fro$50,000 in damages.
  • In December 2015, a customer alleged that Eric Kuchel executed trades in their account without authorization. This case was settled for $31,875 in damages.
  • During a FINRA investigation into allegations that he participated in private securities transactions, Eric Kuchel allegedly failed to comply with FINRA’s request for information. Due to this alleged failure to comply, he was barred by FINRA from acting as a securities broker in any fashion.
  • In January 2016, a customer alleged that Eric Kuchel made unauthorized investments and failed to follow their instructions. This case was settled for $35,000 in damages.

What Are Private Placements?

Private placements are unregistered, privately traded securities that are not sold on any public securities exchanges. Because of their private nature, there is a significant lack of over-sight when dealing with these products. Many securities brokers, like Eric Kuchel, use this lack of accountability to their advantage when trying to pitch these products to investors. The complex nature of these products makes it easier for securities brokers to misrepresent these products as safe and low-risk.

The truth is that private placements are incredibly speculative and risky investments that are unsuitable for investors with modest investment objectives. They can be so detrimental to customers that they are actually only supposed to be sold to what are known as “accredited investors.” An accredited investor is an individual who has a minimum net worth of $1 million or a minimum yearly income of $200,000.

However, just because an investor is accredited does not automatically qualify them for private placements. This is because of how illiquid these products are. For publicly traded securities, an investor can liquidate their shares and receive the stated market value; however, private placements operate differently. The amount a shareholder can receive should they need to liquidate their shares does not always equate to the stated market value.

Despite the the incredible unsuitability of private placements, securities brokers, like Eric Kuchel, continue to push these products because of the incredibly high commissions they receive when executing the transaction. This is yet another reason that private placements are detrimental to investors.

Oakes & Fosher Can Help

Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with Eric Kuchel, please contact Oakes & Fosher for a free and private consultation.