Have you ever invested any of your hard earned capital with Purshe Kaplan Sterling Investments (CRD#: 35747)? If so, you should be aware of the allegations of misconduct that have been leveled against this broker-dealer. Based in Albany, New York, this firm is licensed to operate in all 50 U.S. states and in the District of Columbia.
At Sonn Law Group, we are committed to fighting for the legal rights and financial interests of investors. Here, our top-rated securities fraud attorneys highlight the history of complaints and industry sanctions that have been brought against Purshe Kaplan Sterling Investments.
Investor Complaints: Purshe Kaplan Sterling Investments
Non-Traded Real Estate Investment Trusts (REITs)
In February of 2017, the Financial Industry Regulatory Authority (FINRA) found that:
Purshe Kaplan Sterling Investments had improperly sold complex non-traded Real Estate Investment Trusts (REITs) to an unidentified Native American tribe. These REITs were sold to the client through Purshe Kaplan Sterling’s registered broker Gopi Krishna Vungarala (CRD No. 4856193).
According to FINRA, this broker repeatedly failed to apply eligible sales discounts related to these transactions. FINRA ordered the brokerage firm to pay the tribe more than $3.3 million in financial restitution along with an additional $750,000 in interest. Without admitting to or denying the misconduct, Purshe Kaplan Sterling Investments consented to the penalties.
Inadequate Due Diligence Regarding Brokers’ Outside Business Activities
In May of 2016, Purshe Kaplan Sterling Investments was censured and fined $200,000 for failing to properly supervise the outside business activities of its registered brokers. Under FINRA Rule 3270, individual brokers have a professional duty to disclose any and all outside business activity, and registered brokerage firms have a legal duty to monitor these activities.
This rule is extremely important, as it helps to ensure that a firm’s brokers are not engaging in outside business conduct that would create a conflict of interest with the firm’s customers. In this case, FINRA investigators found that Purshe Kaplan Sterling Investments was allowing its brokers to engage in outside business transactions, without actually requiring its brokers to submit financial disclosures for review. This is a direct violation of FINRA Rule 3270.
Unsuitable Investment Recommendations
In February of 2011, this brokerage firm was censured and fined $100,000 for recommending unsuitable investments to certain clients. Specifically, customers of the firm were encouraged to purchase high-cost variable annuities.
By failing to review these transactions to ensure suitability, the firm put its clients at financial risk. Brokers and broker-dealers must always ensure that they are only selling their clients investments that are truly appropriate for their individual needs.
Were You a Victim of Securities Fraud?
Our top-rated investment fraud team is standing by, ready to help. At Sonn Law Group, we have handled many complex investor losses claims. If you or a family member lost money investing with Purshe Kaplan Sterling Investments, please contact our firm today to request a free, no obligation review of your case. We will only collect a legal fee if we help you recover compensation for your losses.