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The law firm of Oakes & Fosher is presently investigating the possible misconduct of former securities broker Gopi Vungarala. According to his publicly available FINRA BrokerCheck report, Gopi Vungarala has been the subject of a FINRA sanction.

Gopi Vungarala was a Michigan based securities broker. He worked in the securities industry for twelve years. During his career, he was registered with just two different securities firms.

His Registrations

  • American General Securities (2004-2007)
  • Purshe Kaplan Sterling Investments (2007-2017)

The Allegations

Gopi Vungarala’s publicly available FINRA BrokerCheck report shows that he was sanctioned by FINRA in February 2016. The findings in this matter state that Vungarala made material misrepresentations and omissions of material facts to his customer. His customer in this case was a collective Native American tribe. Vungarala allegedly induced the tribe to invest hundreds of millions of dollars in non-traded real estate investment trusts (REITs) and business development companies (BDCs). He allegedly failed to reveal to the tribe that he received abundantly large commissions on the sales of these products. Of the total $190 million the tribe had invested in these non-traded REITs and BDCs, approximately $9.6 million was paid to Gopi Vungarala in commissions. When commissions are this large, it seriously detracts from the amount of the customer’s principal investment that is actually put toward gaining capital. When this happens it makes it near impossible for customers to profit under anything other than amazing market conditions. Due to these alleged actions, he was barred by FINRA from acting as a securities broker in any fashion.

Non-Traded REITs

Non-Traded Real Estate Investment Trusts, also known as non-traded REITs, are privately traded securities. They are not registered with the Securities and Exchange Commission and do not trade on any public securities exchanges. Because of this, there is a great potential for oversight when dealing in these products. Many securities brokers, like Gopi Vungarala, use this potential for oversight to their advantage when trying to get investors to purchase them. This is because it gives them the opportunity to misrepresent these products as good investments.

The truth is that non-traded REITs are highly speculative and illiquid securities that are only suitable for a select group of “accredited” investors. Despite this, many securities brokers continue to push these products unto unsuspecting investors who do not qualify as “accredited.” This is because they receive excessively high commissions as high as 8 percent when trading these products. When an investor’s principal investment is lowered this significantly, it becomes almost impossible for them to see a profit under anything besides booming market conditions.

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 be entitled to damages.

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