Jerry McCutchen Allegedly Invests Numerous Customers In Unsuitable Non-Traded REITs

The law firm of Oakes & Fosher is presently investigating the alleged misconduct of former securities broker Jerry McCutchen. According to his publicly available FINRA BrokerCheck report, Jerry McCutchen has been the subject of over forty customer disputes--almost all of which were in connection with non-traded REIT investments.

Jerry McCutchen was an Alabama based securities broker. He worked in the securities industry for twenty-seven years. During his career, he was registered with ten different securities firms. He is no longer working as a registered securities broker in any fashion.

His Registrations

• Bay City Securities (1983)


• First Funds Incorporated (1986-1987)


• Central Brokerage Services (1987-1989)


• MML Investors Services (1989-1991)


• Walnut Street Securities (1991-1992)


• Proequities (1992-1995)


• Commonwealth Equity Services (1995-1998)


• FSC Securities Corporation (1998-2003)


• Next Financial Group (2003-2007)


• Berthel, Fisher & Company Financial Services (2007-2014)

The Allegations

Numerous customers of Jerry McCutchen alleged that he recommended highly unsuitable non-traded REIT investments and misrepresented material facts about the investments. Many of these disputes have been settled; however, many of them are still currently pending.

One claim filed in June 2017 has spent the last few years in arbitration. This claim was filed by former customers of Jerry McCutchen against Berthel, Fisher & Company for allegedly failing to prevent McCutchen from investing them in these unsuitable alternative investments. The claimants alleged that, between 2007 and 2012, Jerry McCutchen recommended they purchase unsuitable non-traded REIT products and misrepresented to the customers the associated risks and illiquidity of said products. These alleged actions took place while McCutchen was registered with Berthel, Fisher & Company and simultaneously working for his own company under the name "Retiring with Dignity." This case finally came to an end when the customers were awarded approximately $1.1 million in damages.

What Are Non-Traded REITs?

Non-traded REITs, or Real Estate Investment Trusts, differ greatly from normal investments. They are privately traded alternative investments that do not trade on any public securities exchanges. Because of their private nature, there is a great potential for oversight when dealing in these products. Securities brokers like Jerry McCutchen tend to exploit the complex nature of non-traded REITs when pitching them to potential investors. This complex nature allows brokers to misrepresent non-traded REITs as safe and lucrative investments when, in fact, nothing could be further from the truth.

The truth is that non-traded REITs are incredibly speculative and illiquid securities that are unsuitable for investors. The risks that accompany non-traded REITs are substantial. Since they are poorly regulated and monitored, the chances that they will become worthless is far greater than that of publicly traded securities.

These products are incredibly illiquid due to them not being traded on any public securities exchanges. The stated market value does not always equate to what an investor could receive should the need to liquidate assets arise. If an investor needs to withdraw from a non-traded REIT, they may be offered a buy out that is substantially less than what they are told the product is worth. Because of this, non-traded REITs should never be recommended to investors with higher liquidity needs, no matter how much their net worth may be.

Despite how unsuitable these products are, brokers like Jerry McCutchen continue to push them onto unsuspecting investors. This can occur for a number of reasons; however, the most popular one is because of the incredibly high commissions brokers receive when the transaction is executed. Brokers receive an excessively high portion of the investor's principal investment as their commission when executing a transaction for a non-traded REIT. Because of this, some brokers like Jerry McCutchen continuously recommend them to investors they know are not financially suited for them. The broker's commission for executing the transaction can be as high as ten percent. This commission compounded with other upfront fees can result in up to seventeen percent being drained from the investor's principal at the time of execution. When an investor's principal is lowered that significantly, the only chance they stand of seeing a return on their investment is under the most exceptional 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. Oakes & Fosher is currently representing individuals that have lost money dealing with Jerry McCutchen. If you, or someone you know, have lost money investing with Jerry McCutchen, 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.