Senior Investor Seeks up to $500K in Damages For Loss of Savings
A retiree from Texas has filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against brokerage firm Calton & Associates over losses he suffered in GPB Capital Holdings private placements and other non-publicly traded products. This investor is seeking up to $500K in damages. Arbitrators in Dallas, Texas will hear his case.
At Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com), our Dallas securities fraud attorneys are representing this claimant in his fight to recover his losses.
For the last 30 years, we have been helping and representing investors throughout Texas in their FINRA arbitration cases against the broker-dealers and their registered representatives whose negligence or fraudulent activities caused their financial harm.
Calton & Associates Should Have Known the Investor’s Account was Overconcentrated in GPB Private Placements
The claimant entrusted a sizable amount of his savings, including an IRA, to Calton & Associates. The brokerage firm inherited his account after acquiring another firm, IMS Securities, which is no longer in operation and was expelled by FINRA. This retiree was promised safe, income generating investments with a return of principal.
Instead, his savings were invested in risky privately traded entities, including positions in GPB funds and investments.
These were issued by GPB Capital Holdings, which is an alternative asset firm that is now accused of operating a more than $1.8B Ponzi scheme. Other positions sold to this older investor included the Healthcare Trust Real Estate Investment Trust (REIT), and an investment called CION. Both Healthcare Trust REIT and CION also appear to be in trouble.
Overconcentrating the claimant’s portfolio in any investment, let alone non-publicly traded investments that are risky and illiquid, is typically an unsuitable move, especially for a conservative, older investor. This Texas retiree lost nearly $500K.
These unsuitable investment recommendations were made for the claimant by an ex-broker at IMS Securities. However, Calton & Associates took over the account, the firm, the investments, and the Dallas-based investor was reassured that all was well with his funds.
Now, the elderly investor is alleging a number of fraudulent and negligent actions such as:
- Misrepresentations & omissions
- Unsuitability
- Overconcentration
- Breach of contract
- Vicarious liability
- Failure to supervise and other wrongdoing.
The original broker of record was Thurman Crawford. He was replaced by another ex-IMS broker turned Calton agent. It also appears that Crawford and the other broker may have been self supervised. This means that a supervisor would not have been required to approve trades and recommendations or properly assess the accounts.
Ongoing Inadequate Supervision Has Led to Investment Fraud
This is not the first time that Calton & Associates has come under fire for allegedly inadequate supervision of its brokers.
Previous customer complaints against the firm have made similar allegations. The broker-dealer and its registered representatives also have been accused of unsuitability, misrepresentations and omissions, and breach of fiduciary duty before. There is an affirmative duty to provide supervision on an on-going basis.
Thurman Crawford and the subsequent Calton & Associates broker both have complaints on their official CRD record. This includes earlier investor claims involving unsuitable private placements and notes during their time as IMS brokers. One case was settled for over $275K and another over $170,000.
Experienced Dallas Broker Fraud Attorneys Fighting For Investors
Over the years, SSEK Law Firm has represented retirees, conservative investors, retail investors, high net worth individuals, and institutional investors. We have recovered many millions of dollars on our clients’ behalf.
To schedule your free, no obligation case consultation to discuss losses you suffered after being unsuitably recommended to invest in GPB Capital private placements, contact our Dallas broker fraud lawyers at (214) 613-5306 or our Houston broker-dealer misconduct attorneys at (713) 227-2400 today.