The law firm of Oakes & Fosher is presently investigating the alleged misconduct of securities broker Jeffrey Nesseth. According to his publicly available FINRA BrokerCheck report, Jeffrey Nesseth has been the subject of multiple customer disputes over the course of his career.

Jeffrey Nesseth is presently operating as a Texas based securities broker. He has worked in the securities industry for twenty-nine years. During his career, he has been registered with seven different securities firms.

His Registrations

  • Morgan Stanley (1990-2002)
  • Wachovia Securities (2002-2003)
  • Main Street Management Company (2003-2004)
  • QA3 Financial Corp. (2004-2011)
  • Girard Securities (2011)
  • Allied Beacon Partners (2011)
  • Independent Financial Group (2011-Present)

The Allegations

  • In June 2010, a customer alleged that Jeffrey Nesseth recommended unsuitable investments in Provident. This case was settled for $47,500 in damages.
  • In June 2018, customers alleged that Jeffrey Nesseth over-concentrated their account in highly unsuitable non-traded REITs. This case is currently pending. The customer is seeking $100,000 in damages.

Non-Traded REITs

Non-traded REITs, or real estate investment trusts, are privately traded investments. This means they are not traded on any public securities exchanges. Because of this, non-traded REITs are very poorly regulated. Many less than scrupulous securities brokers utilize this lack of regulation to their advantage and misrepresent these products as safe and consistently lucrative investments. The truth of the matter is that the lack of regulation and the volatility of the real estate market makes these securities incredibly speculative.

While there might be some investors looking to take bigger risks with their money, there is another significant drawback of non-traded REITs–the rampant illiquidity. These products are some of the most illiquid securities that plague the market. The amount that an investor could receive should the need to liquidate their shares arise does not necessarily equate to what the stated market value of the REIT. Investors are usually offered a buy out that is less than the value of the product if they wish to liquidate before the project’s completion.

Despite how speculative and illiquid non-traded REITs are, less than scrupulous securities brokers continue to pressure unsuspecting investors into purchasing them. This is because brokers can receive up to ten percent of the investor’s principal investment as their commission when executing the transaction. This is compounded with other upfront fees that can drain an investor’s principal investment of up to 17 percent. When an investor’s principal investment is lowered that significantly, it makes it almost impossible for them to see a return on their investment 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 actually 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 Jeffrey Nesseth, please contact Oakes & Fosher for a free and private consultation. Oakes & Fosher handles cases on a contingency basis, which means there are no fees charged unless we collect for you.