The law firm of Oakes & Fosher is presently investigating the alleged misconduct of former securities broker Tom Parks. According to his publicly available FINRA BrokerCheck report, Tom Parks has been the subject of numerous customer disputes—most of which have been filed as recent as 2015.
Tom Parks was a Texas based securities broker. He worked in the securities industry for twenty-nine years. During his career, he was registered with six different securities firms. He is no longer working as a registered securities broker in any fashion.
His Registrations
- IFP, Incorporated (1987-1990)
- Signal Securities (1990-1992)
- Intersecurities (1992-1993)
- American Express Service Corporation (1994)
- IDS Life Insurance Company (1993-2006)
- Ameriprise Financial Services (1993-2016)
The Allegations
- In March 2015, a customer alleged that Tom Parks recommended unsuitable investments that included a variable annuity, ETFs, Non-Prop Mutual Funds, and oil and gas MLPs. This case was settled for $70,000 in damages.
- In August 2015, a customer alleged that Tom Parks not only recommended unsuitable investments, but that he also refused to respond to e-mails concerning the losses. This case was settled for $50,000 in damages.
- In October 2015, customers alleged that Tom Parks made material misrepresentations, made unsuitable recommendations, breached contract, engaged in fraud, handled their account negligently, and breached his fiduciary duty. This case is currently pending. The customers are seeking $1 million in damages.
- In April 2016, Tom Parks resigned from his position at Ameriprise Financial. This was due to the fact that he had been placed on heightened supervision for allegedly violating the companies policy related to suitability, client disclosure, and outgoing correspondence.
- In May 2016, customers alleged that Tom Parks recommended unsuitable investments that included a variable annuity, mutual funds, and oil and gas master limited partnerships. This case was settled for $150,000 in damages.
- In June 2016, a customer alleged that Tom Parks placed her in various unsuitable investments which included non-Traded REITs, oil and gas master limited partnerships, and in an equity mutual fund on margin. This case was settled for $180,000 in damages.
- In September 2016, a customer alleged that Tom Parks recommended unsuitable equities, private investment funds, and oil and gas MLPs. This case was settled for $175,000 in damages.
- In October 2016, customers alleged that Tom Parks recommended unsuitable oil and gas MLPs, a closed-end mutual fund, and a non-traded business development company. This case was settled for $37,000 in damages.
- In January 2017, a customer alleged that Tom Parks recommended unsuitable mutual funds and oil and gas MLPs. This case was settled for $210,000 in damages.
- In March 2017, a customer alleged that Tom Parks recommended they purchase unsuitable variable annuities. This case was settled for $30,000 in damages.
- In May 2018, customers alleged that Tom Parks placed them in highly unsuitable variable annuities and oil and gas MLPs. This case was settled for $90,000 in damages.
Variable Annuities
Annuities are investment vehicles that are designed for an individual to receive income during their retirement. It centers around an individual paying scheduled premiums up until their retirement date–at which point they begin receiving scheduled distributions that act as their income during retirement. There are two main types of annuities. A fixed annuity is pretty straight forward. The amount that an individual receives during their retirement is entirely determined by how much they paid in premiums–plus interest. A variable annuity on the other hand takes advantage of the equities market. The premiums that an individual pays are then invested in the equities market. The amount that an individual receives during their retirement is dependent on how well the invested premiums performed.
The truth about variable annuities is that they are only suitable for a certain type of investor. This would be an individual with lower liquidity needs. This is because variable annuities are some of the most illiquid products out there. Investor’s incur incredibly high penalties and tax consequences when withdrawing from, or surrendering, their variable annuity during its surrender period. Variable annuities should never be recommended to investors that might need to liquidate assets someday should the need arise.
Non-Traded REITs
Non-traded real estate investment trusts, or REITs, are privately traded securities that are not traded on any public securities exchanges. Because of this, there is a significant lack of oversight for these products. Many less than scrupulous securities brokers exploit this lack of oversight as it allows them to misrepresent non-traded REITs as low-risk and consistently lucrative investments–when nothing is actually further from the truth.
The truth is that non-traded REITs are speculative and illiquid securities that are rarely suitable for investors. Despite this, less than scrupulous securities brokers will still recommend these products to financially unsuited investors because of the incredibly high commissions they receive when the transaction is executed. Commissions for non-traded REITs can be as high as ten percent. This compounded with other upfront fees can drain investor principals of up to 17 percent when the transaction is executed.
Oil and Gas Master Limited Partnerships
Oil and gas master limited partnerships, or MLPs, are securities designed to fund energy products. For their investment in these projects, the investor is paid scheduled distributions. Many brokers use this fact to make these products appear more alluring to investors. The truth is that, like non-traded REITs, oil and gas master limited partnerships are incredibly speculative and volatile. A drastic change in oil and gas prices can cause an investor’s shares to become next to worthless. Unlike non-traded REITs, these products are technically traded publicly; however, this does not change how speculative they are due to the volatile nature of the industry.
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 Tom Parks, 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.
