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Articles Tagged with cetera advisor networks

Peter Gerhard Klaas (CRD #2381681) is a former broker and investment advisor, and was employed at El Segundo, CA-based Cetera Advisor Networks since 05/2017. Klaas was previously employed with Allegis Investment Services (05/2014-03/2017,) Signator Financial Services (04/2011-06/2014), and LPL Financial (09-2007-05/2011.) No current employment information is available.

David-Levy-of-Titus-Rockefeller-LLC-Permanently-Barred-from-Broker-Activity-After-Long-Career-of-Suspicious-Activity-300x200The Colorado Division of Securities is currently investigating broker Klaas along with broker Heath Bowen (CRD #4824684) for putting advisory clients in high-risk and complex option trades that these clients didn’t understand. CDS is not requesting monetary damages in this pending investigation, but is asking for the revocation of Klaas’ licensure. This investigation began while Klaas was employed with Allegis.

Cetera notified Klaas that he was subject to disqualification stemming from the Consent Cease and Desist Order dated March 12, 2018 filed by the Securities Commissioner of Colorado. On 4/18/2018, Klaas resigned from Centera.

Peter Gerhard Klaas (CRD# 2381681) is currently registered as a broker and investment advisor, and is employed at El Segundo, CA-based Cetera Advisor Networks since 05/2017. He is registered with Cetera in both Murray, UT and Las Vegas, NV, and licensed in Arizona, Idaho, Nevada and Utah.

Klaas was previously employed with Allegis Investment Services (05/2014-03/2017,) Signator Financial Services (04/2011-06/2014), and LPL Financial (09-2007-05/2011.)

The Colorado Division of Securities is currently investigating broker Klaas for along with broker Heath Bowen (CRD# 4824684) for putting advisory clients in high-risk and complex option trades that said clients didn’t understand. CDS is not requesting monetary damages in this pending investigation, but is asking for the revocation of Klaas’ licensure. This investigation began while Klaas was employed with Allegis.

Founded in 1983, Cetera Advisor Networks, LLC (CRD# 13572) is one of the largest independently managed brokerage firm in the U.S. Based in El Segundo, California, the company has a network of 10 broker-dealer firms consisting of nearly 10,000 advisors.

Cetera was originally created under the name of Financial Network Investment Corporation (FNIC). FNIC was sold to Aetna Financial Services in 1997; three years later, Aetna was acquired by ING Group. The firm – along with two other ING Group firms – was bought by Lightyear Capital, where it was renamed Cetera Financial Group.

In 2014, Lightyear sold Cetera for $1.15 billion to RCS Capital Corporation, which was partially owned by Nicholas Schorsch. Schorsch and his companies became infamous for the many BDCs and REITs they sponsored.

Morgan Stanley Discharges and FINRA Permanently Bars Broker Samuel Wylie Sloane on silverlaw.comFINRA entered into a settlement with Cetera Advisor Networks LLC (CRD# 13572) over improprieties related to mutual sales fund charge waivers.

According to the Acceptance, Waiver and Consent (“AWC’) entered into between Cetera and FINRA, Cetera disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase certain shares in mutual funds without a front-end sales charge.  Instead, Cetera sold these customers shares with front-end or back-end sales charges and higher ongoing fees and expenses.

Cetera did not waive the additional mutual fund sales charge even though customers qualified for it and, according to the AWC, Cetera carried on this conduct between July 2009 and January 2017.

Silver Law Group is investigating Houston, Texas-based Summit Brokerage Services, Inc. (CRD# 34643) broker Keith A. Bradley (CRD# 868141) after a customer filed a FINRA arbitration alleging unsuitable recommendations and negligence.

According to Bradley’s FINRA BrokerCheck report, a customer filed a FINRA arbitration against Bradley in July 2016 alleging unsuitable investments, negligence, and $100,000 in damages.

In addition to the FINRA arbitration filing, Bradley has four other disclosures on his FINRA BrokerCheck report.  The other four are all tax liens accrued in separate cases.  His first came in 1989 and is for an unspecified amount.  His second tax lien was in 1999 in the amount of $109,000.  His third came three years later in 2002 in an amount of $108,000.  His most recent tax lien was in 2011 in the amount of $400,000.

Silver Law Group is investigating former Plano, Texas-based VSR Financial Services, Inc. (CRD# 14503) broker John H. Towers (CRD# 700221) due to an extraordinarily high amount of FINRA BrokerCheck disclosures alleging unsuitable recommendations and negligence.

According to John H. Towers FINRA BrokerCheck report, Towers has 46 misconduct disclosures, most of which are FINRA arbitrations.  All the FINRA arbitrations allege that Towers recommended unsuitable investments and many allege overconcentration, and all but five of the disclosures have come in the last five years.

This is an extraordinary amount of FINRA BrokerCheck disclosures.  While one or two complaints over a long period of time in the industry is not unheard of, the complaints Towers has amassed over a short period of time is concerning.  Out of the 46, 42 are FINRA arbitrations and 35 of those have settled.

Cetera Financial Group subsidiary VSR Financial Services, Inc. (CRD# 14503) is winding down and transferring some of its brokers to other Cetera Financial Group broker-dealers.

VSR is one of Cetera Financial Group’s (“Cetera”) many independent brokerage firms.  Cetera was acquired by Nicholas “Nick” Schorsch’s RCS Capital in 2014 in an acquisition spree used to create a selling network for RCS Capital’s products, including numerous business development companies (“BDCs”) and non-traded REITs.  Many of Cetera’s brokerage firms operate under Cetera Advisor Networks, LLC (CRD# 13572), a list of which can be found here.

According to some sources, the move is part of an ongoing plan to evade RCS Capital’s poor reputation.  VSR will be the second firm under the Cetera umbrella to be shut down if it can beat Investors Capital Corp. (CRD# 30613), which is also part of Cetera’s Financial Group and expected to also be closed or consolidated in the coming months.  J.P. Turner & Company, L.L.C. (CRD# 43177), shuttered in 2015, was the first Cetera subsidiary broker-dealer to close.

Cetera Investment Services, LLC (CRD# 15340) entered into a Letter of Acceptance, Waiver and Consent (“AWC”) with FINRA after the regulatory body alleged it failed to notify account owners regarding changes to their account records.

According to the AWC, from October 1, 2008 through November 15, 2013, Cetera failed to mail or otherwise furnish 57,881 notifications to account owners of record regarding changes to their accounts, including, changes in the name of the account holder, address changes and more importantly, investment objective changes in the account.  The significance of this that any change in the investment objectives in the account would affect what would be considered a suitable investment.

As part of the AWC, Cetera agreed to a censure and a fine in the amount of $75,000.  Since Cetera’s formation in November 2012, it has been subject to nine (9) disclosures on its FINRA BrokerCheck report.

United Development Funding IV (“UDF IV”) announced a distribution amidst a continuing SEC investigation and delisting from NASDAQ exchange.

On November 8, 2016, United Development Funding (“UDF”) announced that its public real estate investment trust United Development Funding IV’s board of trustees has authorized a cash distribution of $0.08 per share payable on November 28, 2016 to its shareholders.

Though UDF shareholders do not have much to celebrate,  this distribution presents some   good news given the storm the company has been through.  For example, most recently, in October 2016, UDF IV was delisted from the NASDAQ Stock Market and is now listed on the OTC Markets under the symbol UDFI.  It’s currently trading at $2.76 per share.

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