David Lerner Associates Unsuitably Recommended Energy Resources 12 and Energy 11 To Disabled Widower

Family of Senior Investor Pursues Up to $500K in Damages on His Behalf

The family of a Connecticut widower has filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against David Lerner Associates after the older investor suffered a six-figure loss in Energy 11 and Energy Resources 12, which are sold exclusively by the brokerage firm to its customers. 

The claimant, who suffers from diminished capacity and is not fluent in English, is an unsophisticated investor who should never have been invested in these oil and gas-related investments. Yet for whatever reason, a David Lerner Associates broker unsuitably recommended both of these financial products. 

Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) is representing this elderly investor in his FINRA arbitration claim to recover damages. Our stockbroker attorneys have been investigating David Lerner Associates for some time now. 

Claimant Alleging Gross Negligence and Unsuitability 

In his FINRA arbitration claim, this claimant is alleging unsuitability, failure to supervise, misrepresentations, omissions, and negligence. He had trusted David Lerner Associates to take care of his life savings for many years. Instead, one of the firm’s brokers recommended that he invest a substantial amount of his funds—about $200K—in illiquid private placements, including Energy 11 and Energy Resources 12. 

David Lerner Associates has recently been the subject of numerous investor claims for losses related to both of these non-public limited partnerships. They involve oil and natural gas properties and pay high commissions and fees to the firm and its registered representatives. Energy 11 stopped paying dividends a while ago and is likely worthless. 

Oil and Gas Investments Are Unsuitable for Retail Investors 

Highly illiquid and vulnerable to market volatility, oil and gas investments are generally not very suitable for most retail investors, retirees, and other conservative and/or inexperienced investors who cannot tolerate/do not want to take on much risk. Not only that but Energy 11 and Energy Resources 12 are both private placements. 

This makes them unregistered securities and should only be recommended to accredited investors who meet certain income level minimums and are able to understand the risks involved with such investments. The investor’s lack of fluency in English and health issues would have made such comprehension impossible.  

David Lerner Associates Breached Fiduciary Duties to Claimant

David Lerner Associates clearly breached the fiduciary duties it owed to this older investor. Not only did the firm lack reasonable grounds for recommending these oil and gas-related private placements to the claimant, but also they profited while he suffered significant financial losses.

The broker-dealer and its supervisors either knew or should have known that their financial advisor was in a position to cause the claimant financial harm and clearly failed to properly supervise this registered representative. Now, the claimant has not only lost assets, but also sustained consequential losses, experienced injury to his property and/or person, and suffered mental and emotional distress.

Knowledgeable Energy Resources 12 and Energy 11 Fraud Law Firm  

Already, SSEK Law Firm has filed several FINRA arbitration claims on behalf of investors against David Lerner Associates. Call our FINRA attorneys at (800) 259-9010 today if you or someone you love lost money in Energy 11 or Energy Resources 12 so that we can help you explore your legal options.