Oakes & Fosher files an FINRA arbitration claim against LPL Financial Group for the actions of former SII Investments broker Pamela Sue Espinoza AKA Pamela Davis for the unsuitable recommendation of non-traded REITs and Equity Indexed Annuities.
Oakes & Fosher, LLC recently filed an FINRA arbitration claim against LPL Financial Group for the activities of a former SII Investments broker. Pamela Davis, now known as Pamela Espinoza, recommended that an elderly, disabled, and retired nurse invest over half of her net worth in illiquid and high-risk alternative investments. Her actions have caused a need to pursue LPL Financial FINRA arbitration and recover client losses.
Brokers recommend these types of investments due to the high upfront commissions associated with them. If your financial advisor recommended an unsuitable investment that resulted in significant losses, Oakes & Fosher is here to help. Our experienced securities fraud and broker misrepresentation attorneys will fight for you.
What Are Non-Traded Real Estate Investment Trusts?
Non-traded REITs are investment pools designed to earn investors income through the purchase of real estate. Most often, these investment pools fund development projects that generate income through rent payments.
Non-traded REITs are not available on any public securities exchanges. Instead, brokers offer these products to investors privately until the investment pool raises enough capital to begin or continue operations.
Due to their private nature, it’s challenging for securities firms and regulatory agencies to monitor these products. Therefore, securities brokers frequently misrepresent non-traded REITs as safe investments with high annual returns. However, that couldn’t be further from the truth.
The Truth About Non-Traded REITs
Non-traded REITs are risky and illiquid securities, making them highly unsuitable for many investors. Stockbrokers often pitch these products to investors with excitement and urgency. They do so in an attempt to convince investors that they may miss out on a perfect investment opportunity.
However, stockbrokers frequently misrepresent or fail to disclose the speculative nature of non-traded REITs when pitching to potential investors. There is no guarantee that a non-traded REIT’s development projects will be successful because these funds are not fortune 500 companies with a history of successful projects. Instead, they are private investment pools subject to high fees and internal conflicts of interest that make profiting difficult.
Pursuing LPL Financial FINRA Arbitration for Non-Traded REITs
Pamela Espinoza knowingly misrepresented the non-traded REIT to her elderly, disabled, and retired client. She selfishly recommended the unsuitable investment because of its high commission and needs to take responsibility for her actions. Oakes & Fosher is pursuing LPL Financial FINRA arbitration as a means to recover damages.
What is an Equity Indexed Annuity?
An equity indexed annuity lies between a variable and fixed annuity. It pays a low fixed rate while offering the investor a small participation in the upward movement of the stock market. It’s alluring to some investors because stockbrokers pitch the annuity in a way that allows them to see profits on their investment without exposing their principal to risk.
Essentially, the investor receives a portion of the interest they would have for a typical fixed annuity. However, the rest of the interest links to an equities index, like the S&P 500. The investor can see returns based on how the index performs over the life of their annuity.
The annuity has high annual costs that spread to the market, making it unsuitable for many investors. Also, due to the monumental upfront commission paid to the broker, the cost to sell this product during the surrender (selling) period may range between 10-20 percent.
Recovering Damages Through LPL Financial FINRA Arbitration
Pamela Espinoza displayed the equity indexed annuity in a favorable light to her elderly client. She did not inform the investor of the high annual costs – instead, she only disclosed the benefits. Stockbrokers must be held accountable for the damages they have caused investors. Oakes & Fosher seeks to assist wronged investors across the United States and ensure brokers and their firms take responsibility.
Contact Oakes & Fosher Today
If you suffered losses from a non-traded REIT or lost money due to the surrender charge of an equity indexed annuity, or you are still stuck in the annuity, please contact Oakes & Fosher today.
Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you believe that your securities broker placed you in a highly unsuitable non-traded REIT or equity indexed annuity, you may be entitled to damages. Contact Oakes & Fosher for a free and private consultation. We will fight for you just as we are recovering losses through our LPL Financial FINRA arbitration claim.