In July 2019, a former client of Berthel, Fisher & Company Financial Services, Inc. won an award in a FINRA arbitration for losses sustained from real estate investment trusts (REIT) losses. The respondents in the case were Jerry McCutchen, Sr. (CRD# 1076678), Thomas Berthel (CRD# 823289), Ronald Brendengen (CRD# 1675332) and Richard Murphy (CRD# 4893748).
The first respondent won $231,827 in compensatory damages plus interest at 7.5% per annum until the amount is paid in full. Berthel Fisher is liable for and shall pay to the Trawicks the amount of $50,000 in punitive damages. McCutchen is liable for and shall pay to the Trawicks the amount of $10,000 in punitive damages.
The second respondent won $220,288 in compensatory damages plus interest at 7.5% per annum until the amount is paid in full. Berthel Fisher is liable for and shall pay to the Bjornases the amount of $50,000 in punitive damages. McCutchen is liable for and shall pay to the Bjornases the amount of $10,000 in punitive damages.
The third respondent won $169,420 in compensatory damages plus interest at 7.5% per annum until the amount is paid in full. Berthel Fisher is liable for and shall pay to the Greers the amount of $50,000 in punitive damages. McCutchen is liable for and shall pay to the Greers the amount of $10,000 in punitive damages.
Additionally, the respondents are jointly and severally liable for and shall pay to Claimants the amount of $248,614 in attorneys’ fees plus $110,966 in costs and other damages.
The causes of action included violations of the Alabama Securities Act; breach of fiduciary duty; violation of FINRA/NYSE rules; breach of contract and negligence; negligent supervision; fraudulent inducement to hold investment; and control person liability under Alabama and federal securities laws. The causes of action relate to Claimants’ investment in equipment leases, Direct Participation Programs and the following real estate investment trusts (“REITs”): American Realty Capital Trust; Atel Fund 14; Behringer Harvard Multifamily REIT I; Cole Credit Property Trust III; Hines Global REIT; ICON Equipment and Corporate Infrastructure; Noble Royalty Access Fund V; Northstar Income Opportunity REIN T; United Development Funding IV; and Virtus Storage Investment IV. The FINRA arbitration hearing was conducted in Atlanta, Georgia.
McCutchen was registered with Berthel, Fisher & Company Financial Services, Inc. in Mobile, Alabama from 2007 to 2014. McCutchen has also been the subject of 41 customer complaints between 2000 and 2019, two of which were closed without action and two were denied, according to his CRD report. Recent complaints are regarding:
- December 2018. “The clients allege the investments they purchased between 2007 and 2013 were unsuitable and misrepresented by the representative. The clients also allege the firm failed to supervise the actions of the representative and to conduct adequate due diligence.” The customer is seeking $625,000 in this pending customer complaint.
- September 2018. “The clients allege the products they purchased between 2010 and 2014 were unsuitable and misrepresented to them by the representative. They also allege the firm failed to supervise the actions of the representative.” The case is currently pending.
- May 2018. “The client alleges the investments she purchased in 2007 and 2009 were unsuitable and misrepresented to her by the representative. The client also alleges the firm failed to supervise the actions of the representative.” The customer is seeking $900,000 in this pending customer complaint.
- May 2018. “The client alleges the investments she purchased in between 2005-2010 were unsuitable and misrepresented to her by the representative. The client also alleges the firm failed to supervise the actions of the representative.” The customer is seeking $300,000 in this pending customer complaint.
- March 2018. “The claimants allege the investments they purchased in 2008 were unsuitable and misrepresented to them. They also allege the firm failed to supervise the representative.” The customer is seeking $1 million in this pending customer complaint.
- February 2018. “The client alleges that the investments he purchased in 2007 and 2008 were unsuitable and misrepresented by the representative. The client also alleges the firm failed to supervise the actions of the representative.” The case was settled for $12,500.
Berthel has been registered with Securities Management & Research, Inc. in Cedar Rapids, Iowa since 2011 as well as Berthel, Fisher & Company Financial Services, Inc. in Cedar Rapids, Iowa and Bonita Springs, Florida since 1983. Berthel has also been the subject of two customer complaints between 2000 and 2004, according to his CRD report. In 1993, the National Association of Securities Dealers, Inc. sanctioned Berthel to a $5,000 civil and administrative penalty and fine, alleging that Berthel engaged in a private securities transaction involving a customer but failed to provide in writing whether another representative could participate in said transaction, and failed to record the transaction on the firm’s books and records.
Murphy has been registered with Securities Management & Research, Inc. inCedar Rapids, Iowa since 2012 and with Berthel, Fisher & Company Financial Services, Inc. in Cedar Rapids, Iowa since 2004.
Brendengen has been registered with Securities Management & Research, Inc. in Cedar Rapids, Iowa since 2011 and Berthel, Fisher & Company Financial Services, Inc. in Cedar Rapids, Iowa since 1992. In 1996, Brendengen was sanctioned to a $2,500 monetary fine by the National Association of Securities Dealers, Inc. for an unknown reason.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Berthel, Fisher & Company Financial Services, Inc. may be liable for investment or other losses suffered by its customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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