Securities Arbitration Lawyers BlogWest Palm Beach-Based, RBC Broker Samuel K. Kolton Under Investigation for Overconcentrating Customers in Puerto Rico Bonds
Silver Law Group is investigating West Palm Beach, Florida-based RBC Capital Markets (“RBC”) broker Samuel K. Koltun (CRD# 1739664) for customer complaints alleging he unsuitably recommended and overconcentrated their portfolio in Puerto Rico bonds and failed to disclose the risks associated with such an investment.
Koltun has six misconduct disclosures on his Financial Industry Regulatory Authority (“FINRA”) BrokerCheck report, of which three have been reported in the past eight months. The three most recent complaints all allege overconcentration in Puerto Rico bonds.
This isn’t Koltun’s first encounter with trouble, though, according to the report. FINRA suspended Koltun in 2004 for unsuitable recommendations he made to customers.
It is no secret that Puerto Rico’s economy and the country have not been performing very well. Consequentially, its municipal bonds and other related investments have been extraordinarily volatile, highly risky, and speculative. Just recently, on May 2, 2016, Puerto Rico missed a $422 million payment to its debtors, the largest default to date. The situation only continues to get murkier as no solution has been enacted to deal with $70 billion in Puerto Rican debt.
Many of the investors who invested in Puerto Rico are not wealthy individuals or hedge funds who can withstand huge losses. About 30 percent of the debt is held by middle class Puerto Ricans, and another 15 percent is held by Mom-and-Pop Americans, according to a CNN report.
Silver Law Group and its attorneys have a great deal of experience pursuing claims against brokers who unsuitably recommended and overconcentrated their customers’ assets in Puerto Rican municipal bonds, recovering millions of dollars for aggrieved investors in FINRA arbitration.
Many of the claims our firm has helped satisfy arose out of the Securities and Exchange Commission’s (the “SEC”) complaint regarding UBS Puerto Rico and proprietary funds the investment firm created that predominantly featured Puerto Rican municipal bonds. Many brokers from other firms followed suit, though, and overconcentrated their customers’ portfolio in highly risky and speculative Puerto Rico bonds.
Among other basic tenets, brokers are required to recommend suitable investments to their customers. This requires that the broker 1) investigates and conducts due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors to form a reasonable basis for the recommendation of the product; and 2) appropriately matches the investment with the customer’s specific investment needs and objectives, such as the customer’s retirement status, long or short-term goals, age, disability, income needs, or any other relevant factor.
If you have lost money investing with Koltun or in Puerto Rico bonds, Silver Law Group provides the most experience and proven results for helping you recover some or all of your losses through FINRA arbitration.
Silver Law Group represents the interests of investors who have been the victims of investment fraud. If you have questions about your legal rights, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.