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 investors who have lost money in this fashion may be entitled to damages. The law firm of Oakes & Fosher is interested in hearing from investors who believe this may be them.
Oakes & Fosher is currently investigating the possible misconduct of securities broker Walter Gammon. According to his publicly available FINRA BrokerCheck report, Walter Gammon has been the subject of multiple customer disputes over the course of his career in connection with non-traded REIT investments.
William Gammon is presently working as a Maryland based securities broker. He has worked in the securities industry for twenty-eight years. During his career, he has been registered with seven different securities firms.
His Registrations
- Shearson Lehman Hutton Inc. (1988-1990)
- Prudential Securities Incorporated (1990-1995)
- New England Securities (1997-2001)
- USA Allianz Securities (2001-2006)
- Questar Capital Corporation (2006-2007)
- Centaurus Financial (2007-2010)
- Ameriprise Financial Services (2010-Present)
The Allegations
- In July 1991, a customer alleged that William Gammon engaged in fraud and breached his fiduciary duty while handling her account. Gammon allegedly failed to disclose all the risks associated with the investments Gammon placed her in. This case was settled for $176,000 in damages. He received an identical complaint in August 1991. This case was settled for $138,500 in damages.
- In December 2009, a customer alleged that William Gammon purchased a corporate note and a non-traded REIT for them on their behalf and that these investments were highly unsuitable due to their illiquid nature. This case was settled for $250,000 in damages.
- In December 2011, a customer alleged that William Gammon violated federal and state securities laws, breached contract, breached his fiduciary duty, negligently handled their account, and engaged in common law fraud. This case was settled for $25,000 in damages.
- Also in December 2011, a customer alleged that William Gammon purchased unregistered securities on their behalf, engaged in fraud, made unsuitable investment recommendations, misrepresented and omitted material information, breached contract, breached his fiduciary duty, and overall handled their account negligently. This case was settled for $72,500 in damages.
- In January 2012, a customer alleged fraud, misrepresentation, negligence, and violation of the Maryland Securities Act in connection with the purchase of various non-traded REITs. This case was settled for $40,000 in damages.
- In May 2012, a customer alleged that William Gammon violated federal securities laws, breached contract, engaged in common law fraud, breached his fiduciary duty, and handled their account negligently. These allegations regarding the sale of non-traded REITs and equipment leasing limited partnerships all purchased throughout 2007 and 2008. This case was settled for $73,000 in damages.
- In September 2013, customers alleged that William Gammon made false and misleading statements in addition to omitting material information concerning non-traded REITs he sold to them. The customers believed that Gammon sold these products for his own benefit as non-traded REITs generate excessively high commissions for the broker when sold. This case was settled for $340,000 in damages.
- In January 2015, a customer alleged fraud, constructive fraud, negligent misrepresentations and omission, negligence, and violation of the Maryland Securities Act. This case was settled for $64,835 in damages.
- In November 2015, a customer alleged that William Gammon invested her funds set aside for her retirement into speculative and high risk private placements. Gammon allegedly failed to recommend to her any low or moderate risk investments that would be far more suited for a retired widow that was an unsophisticated investor. The customer also alleged that Gammon’s commissions associated with these private placements were excessively high. The private placements in question were Core Series, KBS REIT, Behringer Harvard REIT, and Healthcare Trust of America. This case was settled for $55,000 in damages.
What Are Non-Traded REITs?
Non-traded REITs, also known as Real Estate Investment Trusts, are privately traded securities, or private placements, not sold on any public securities exchanges. Due to their private nature, there is a great potential for oversight when purchasing these securities. Securities brokers, like William Gammon, utilize this potential for oversight to their advantage when pitching non-traded REITs to potential customers. It gives brokers the opportunity to misrepresent key details about the products and convince potential investors that they are low-risk.
The truth of the matter is that non-traded REITs are incredibly speculative and high-risk investments that are highly unsuitable for investors with more modest investment objectives. These products are actually so risky that they are only supposed to be sold to what are known as “accredited” investors. An accredited investor is an individual with either a net worth of at least one million dollars of a yearly income of at least $200,000. Non-traded REITs are highly unsuitable for any investor who does not qualify as accredited.
However, being accredited does not automatically qualify an investor as suitable for a non-traded REIT. Another drawback of these products is how illiquid they are. When an investor liquidates their shares of a publicly traded product, they receive the stated market price; however, privately traded securities operate differently. The stated market value of the security does not necessarily equate to what a shareholder can receive should they need to liquidate their shares. They might have to wait until such a time that they can be bought out for what the shares are actually worth.
Despite the rampant unsuitability associated with non-traded REITs, they continue to be sold to investors by securities brokers like William Gammon. This is mainly because of the excessively high commissions that brokers receive when executing these transactions. The broker’s commission can range from 5 to 8 percent upfront. When an investor’s principal investment is lessened to that extent, it becomes almost impossible for them to see a profit under anything other than exceptional market conditions.
Investors who have lost money due to being invested in unsuitable non-traded REITs may be entitled to damages.
Oakes & Fosher Can Help
Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with William Gammon, please contact Oakes & Fosher for a free and private consultation.
