Regulator says SII Investments Failed to Supervise Brokers

Regulator says SII Investments Failed to Supervise Brokers

Massachusetts securities regulators recently charged SII Investments with dishonest or unethical conduct and failure to supervise the sale of non-traded real estate investment trusts (REITs) to investors by inflating the liquid net worth of their clients.

Massachusetts securities regulations require that an investor’s purchase of a non-traded REIT can constitute no more than 10% of the investor’s liquid net worth. The regulators’ complaint charges that SII brokers acted dishonestly, improperly calculating their clients’ liquid assets on suitability and disclosure forms for non-traded REITs. The complaint states that SII’s compliance team failed to supervise the sale of inappropriate investments.

The brokerage firm allegedly sold more than $4 million of non-traded REITs, resulting in high commissions for both the firm and its brokers. State regulators say that many of the non-traded REITs would have been in violation of Massachusetts limitations, as well as SII’s internal compliance requirements and mandates. The complaint states that even though SII’s policies are clear that annuities are illiquid products, agents included annuities with material pending surrender fees as part of their liquid net worth calculations. Had these calculations been done correctly, many of these non-traded REIT sales could not have occurred.

SII Investments Part of LPL Financial

SII is an independent broker-dealer within National Planning Holdings, which is being acquired by LPL Financial. In a released statement by LPL, the company said, “Under the construct of our agreement, LPL would not be liable for this matter.”

Have You Lost Money with SII or LPL Financial?

If you believe you have been the victim of investment fraud, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los AngelesNew YorkWest Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.