Cetera B-D on hook for $2.66 million arbitration claim stemming from REITs, annuities

Cetera B-D on hook for $2.66 million arbitration claim stemming from REITs, annuities
In an unusual aspect of the investors' claim and subsequent award against First Allied Securities, the $2.66 million in damages requested matched the amount the three arbitrators awarded.
MAR 14, 2022

First Allied Securities Inc. lost a Finra arbitration claim Friday to two investors who received $2.66 million in damages stemming largely from the sale of nontraded real estate investment trusts and annuities.

The two claimants, Nancy and Ivan Mailhot, filed the claim against First Allied and two other broker-dealers in 2018, alleging negligence, misrepresentation, failure to supervise and other charges in the matter, according to the Financial Industry Regulatory Authority Inc. arbitration panel award.

Only First Allied Securities, which is one of the Cetera Financial Group broker-dealers, was listed as responsible for damages to the Mailhots, according to the panelists' decision, which gave no explanation for the award.

A spokesperson for Cetera Financial Group declined to comment Monday. An attorney for the Mailhots, Gary Menzer, did not return a call to comment.

In an unusual aspect of the investors' claim and the subsequent award, the $2.66 million of damages requested matched the amount the three arbitrators awarded. Most awards pay claimants a percentage of the amount requested.

The investors' claim centered on high commission products, nontraded REITs and annuities. Of the 12 investments listed in the award, six were REITs and four were annuities.

Latest News

Fintech bytes: Envestnet reaffirms $1B RIA commitment with Tamarac tech investment
Fintech bytes: Envestnet reaffirms $1B RIA commitment with Tamarac tech investment

Also, Orion has added BlackRock, Fidelity, and Vanguard to its custom portfolios suite, and RedBlack has set up a new headquarters after crossing a trillion-dollar milestone.

RIA moves: Maridea acquires multigenerational practice in Pennsylvania debut
RIA moves: Maridea acquires multigenerational practice in Pennsylvania debut

Also, New York-based Legacy Edge Advisors names its first-ever CEO, while Novare Capital Management hires a Vanguard veteran with a multigenerational planning focus.

Private equity eyes 401(k) plans, but fees remain a hurdle
Private equity eyes 401(k) plans, but fees remain a hurdle

Asset managers are racing to bring private market products to retirement plans, but cost and liquidity concerns linger.

IRS floats proposal ending tax breaks for schools that weigh race
IRS floats proposal ending tax breaks for schools that weigh race

Treasury's latest tax-exemption crackdown on private schools lands in the wake of a separate push to restrict refundable credits for some immigrant filers.

Trust over tech:  The hidden signal of stock success in the AI era
Trust over tech: The hidden signal of stock success in the AI era

Workforce trust measures predicted which companies came out ahead during COVID-19. The same dynamic may now be playing out across the AI transition — and the data suggests the spread could be just as wide.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income