Finra expels real-estate investment firm formerly known as DT Securities and its CEO

Charges centered around making misrepresentations in private placements

Sep 26, 2016 @ 11:50 am

By Christine Idzelis

The Financial Industry Regulatory Authority Inc. has expelled Markel Newton, a real-estate firm in California formerly known as DT Securities, for making negligent misrepresentations in private placements.

The owner and CEO, Daniel Markel, was at the same time barred for alleged violations in two DT offerings to buy real estate in Florida and Georgia, and a third set up to own and run treatment facilities for alcoholics in California, according to a Finra settlement notice on Friday.

The firm and Mr. Markel should have disclosed in the three private-placement offerings — DT Florida, DT Atlanta, and Fresh Start — that the California Department of Real Estate had filed a complaint against him in 2010. He also improperly released escrow proceeds to buy properties before meeting funding-raising targets that were spelled out in the DT Florida and DT Atlanta offerings, according to Finra.

DT Florida originally sought to raise at least $3 million by Nov. 30, 2009, later extending the closing date to Jan. 29, 2010 with the requirement to return funds to investors if that goal wasn't reached. DT Atlanta initiated a private-placement offering in March 2011 with the aim of raising at least $1.7 million. That minimum was later reduced to $400,000, a target that was never properly met, according to the settlement document.

“They prematurely released escrow funds before reaching the minimum contingency in one offering and by failing to meet the minimum contingency through bona fide sales in another offering,” Finra said in the notice. “Making material misrepresentations or omitting material information is inconsistent with the high standards of commercial honor.”

In July 2010, the California Department of Real Estate filed a complaint against Mr. Markel and a company he owned, DT Ventures Real Estate Investments, for conducting certain activities without a real estate license and making misrepresentations to sellers about deposits that were made for purchases. The following year he agreed to a 30-day suspension.

The Finra document also pointed to Mr. Markel's failure to alert investors to a prior breach in credit obligations.

In a 2013 private-placement memorandum for “Fresh Start,” the offering relating to alcoholic treatment centers in California, he didn't inform investors that a judgement had been entered against him and others the year before for breaching their obligation to repay a $1.9 million credit line with Pacific Western Bank. Fresh Start had been seeking to raise as much $2 million from investors.


What do you think?

View comments

Most watched


Finding your edge from Tony Robbins

Guru Tony Robbins has helped a lot of people, but armed with his psychology Financial Advisor Josh Nelson has helped his practice soar.


Finding innovation in your firm

Adam Holt of AssetMap explains how advisers understand they need to grow, but great innovation may be lurking right under your nose.

Latest news & opinion

SEC sets June 5 date for vote on Regulation Best Interest

Commission adds new item to agenda: Interpretation of broker guidance that qualifies as advice

House passes SECURE retirement bill with massive bipartisan support

The measure allows small employers to band together to offer plans and raises the RMD age. Another provision eases use of annuities in 401(k)s, which critics say goes too far

10 IBDs with the most annuity revenue

Here are the independent broker-dealers that brought in the most annuity revenue last year.

DOL sets date to propose new fiduciary rule

The regulation, expected in December, likely will be contoured to the SEC's new advice standards.

LPL expanding platform to include employee brokers

The largest IBD in the country has agreed to buy a small broker-dealer in Florida to kick off the new effort.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print