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

Jeffrey Schwebach operated most recently as a South Dakota based securities broker. He worked in the securities industry for thirty years. During his career, he was registered with five different securities firms. He is no longer working as a registered securities broker in any fashion.

His Registrations

  • Pruco Securities Corporation (1987-2003)
  • Quest Capital Strategies (2003-2005)
  • Princor Financial Services Corporation (2007-2009)
  • Allegiant Securities (2009-2010)
  • Independent Financial Group (2010-2018)

The Allegations

Jeffrey Schwebach was officially sanctioned by FINRA in June 2019. The findings in this matter state that he engaged in private business dealings by soliciting $895,000 for a non-traded real estate investment fund from multiple investors–many of which were customers of his member firm. Jeffrey Schwebach allegedly failed to obtain his member firm’s authorization before engaging in these private securities transactions. He allegedly told his member firm that his business venture would provide first position mortgages, not that he was going to solicit member firm customers to purchase private securities. Jeffrey Schwebach allegedly received $19,534 in commissions for executing these transactions. Due to these allegations, Jeffrey Schwebach was forced to repay the entire $19,534 in commissions and was suspended from acting as a securities broker in any fashion for a period of eight months.

Non-Traded Real Estate Investment Trusts (REITs)

Non-traded REITs are privately traded securities that are not sold on any public securities exchanges. Many unethical securities brokers will pitch these products to investors without adequately disclosing what they really are. These products’ private nature provide brokers ample opportunity to misrepresent these products as safe and consistently lucrative. The truth is that non-traded REITs are highly unsuitable for most investors due to their rampant risk and illiquidity.

Despite how unsuitable they can be, these less than scrupulous securities brokers continue to push non-traded REITs onto unsuspecting investors because of how financially beneficial it can be to the broker. Even when investors lose significant capital while investing in non-traded REITs, brokers come out on top because of the incredibly high commissions they receive. Securities brokers can receive commissions as high as 10 percent of the investor’s principal investment–which it makes it almost impossible for the investor to see a profit under anything besides booming market conditions.

Securities brokers are obligated to receive approval from their member firm before engaging in outside business activities. This is so that securities firms can prevent investors from being placed in detrimental situations. Many securities firms even prevent their brokers from recommending non-traded REITs altogether. However, those firms that don’t must have adequate procedures in place designed to supervise its registered brokers and see if they are engaging in any unauthorized and potentially harmful activities. This is because it is the securities firm’s responsibility to prevent its customers from being harmed by these types of products.

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 Schwebach, 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.