Two broker-dealers this summer paid $535,000 to investors to settle claims stemming from a former broker, James Walesa, who allegedly sold tens of millions of dollars of illiquid, unsuitable alternative investments to clients for years.
Triad Advisors, which is closing and rolling into the Osaic broker-dealer group, settled two claims in July for $435,000, and at the end of August, Arkadios Capital settled one claim for $100,000, according to Walesa’s BrokerCheck report.
Both firms are based in the Atlanta area, but Walesa, who left the securities industry in 2021 after nearly four decades, worked for almost half his career at Triad.
In the three claims, Walesa did not contribute any payment to the settlements with investors.
The costs associated with Walesa for Osaic, which acquired Triad Advisors when it bought the Ladenburg Thalmann network of broker-dealers in 2020, appear to be rising, perhaps dramatically.
According to Walesa’s BrokerCheck report, Triad Advisors last November settled claims involving Walesa’s sale of illiquid, unsuitable securities for $6.5 million.
Those settlements are on top of a $34 million claim former clients of Walesa filed in the winter against Triad and Arkadios, alleging that Walesa “was involved in unsuitable recommendations for investment in businesses for which he also served in positions of ownership, operation and direction.
That means Walesa allegedly sold investments that he also managed, a potential conflict and red flag.
“Those settlements from over the summer are unrelated to the $34 million claim,” said Dax White, the plaintiff’s attorney in that multimillion dollar claim. That giant lawsuit is scheduled to start being heard in arbitration overseen by the Financial Industry Regulatory Authority Inc. in November 2025.
A spokesperson for Osaic on Thursday did not return a call to comment. Arkadios CEO David Millican also did not return a call to comment.
“I reiterate that I disagree with the allegations made in these suits and maintain that I acted properly in all investment and investment brokerage activities,” Walesa wrote in an email to InvestmentNews. Walesa is now the CEO of Clearday Inc., a senior care technology company based in San Antonio, Texas.
Walesa was a broker at Triad Advisors from 2000 to 2019, according to his BrokerCheck report, and at Arkadios Capital for two years after that. His practice was based in the Chicago suburb of Park Ridge, Illinois.
Osaic, with more than 11,000 financial advisors and $635 billion in client assets, said last month it was reorganizing its management team. That change at Osaic came more than a year after the firm said it was going through a wide consolidation and integration of its various brokerage and advisory firms.
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"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
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