Were you the victim of Presidential Brokerage, Inc. broker Gregory Williams (CRD# 1561089)? Gregory Williams was registered with Forta Financial Group, Inc. in Greenwood Village, Colorado from 2011 to 2020. Previously, Gregory Williams was registered with Morgan Stanley Smith Barney in Denver, Colorado from 2009 to 2011 and with Citigroup Global Markets Inc. in Denver, Colorado from 2005 to 2009.
The clients allege the following in the newly filed FINRA claim:
The Erez Law clients were retired, of advanced age, conservative and unsophisticated investors who were primarily interested in generating a modest degree of income while preserving their irreplaceable retirement savings. The couple entrusted Williams and Presidential with their retirement savings since 2015. Williams presented himself as a fixed income expert and represented he could generate income for the couple during retirement while preserving their irreplaceable retirement savings.
Erez Law alleges that Williams recklessly recommended that the clients concentrate their investments in the risky energy sector, unit investment trusts (UITs), and business development companies (BDCs), including:
- Oppenheimer SteelPath MLP Income Fund
- Center Coast Brookfield Midstream Focus Fund
- Peabody Energy and Ferrell gas junk bonds
- Chesapeake Oil
- Sandridge Energy junk bonds
- Cion Investment Corp. Fund
- FS Energy and Power Fund
- Sierra Income Corp.
- Guggenheim Alternative Income Portfolio Series 12 UIT
Oppenheimer SteelPath MLP Income Fund concentrated in master limited partnerships in the energy sector. The SteelPath Fund was a high risk and unsuitable energy fund. Center Coast Brookfield Midstream Focus Fund is another high risk and unsuitable energy sector fund that concentrated its investments in MLPs. These high-risk energy funds were not conservative and were unsuitable for the clients’ retirement accounts. Additionally, Sandridge Energy and Peabody Energy have gone bankrupt.
Williams exacerbated the risks of the high-risk energy funds by excessively concentrating the couple’s joint account in the energy sector. Although the energy sector makes up a small fraction of the S&P 500 and the economy, Williams recommended a dangerous investment strategy of over-concentrating the clients’ accounts in this sector. This high risk and unsuitable strategy of over-concentrating in the energy sector only further served to increase the risks to which the clients were unknowingly exposed. The energy funds investments that Williams recommended were in the same sector and highly correlated. Consequently, the decline in the sector had a drastically disproportionate negative impact on the clients’ portfolio.
It is alleged that Williams represented that they would receive the income paid by the funds and bonds while preserving their capital invested in the funds and bonds. This was an essential element of the clients’ supposed overall strategy.
According to the claim, even when the couple brought Williams’ attention to declines in prices of their investments, Williams repeatedly represented to them the value of the funds and bonds would return to their purchase price and that they would conserve all capital invested in the securities. Williams repeatedly recommended that the couple hold their energy investments, refrain from selling and continue with the same strategy that he had implemented.
It is alleged that Williams also recommended high risk and unsuitable alternative investments and UITs. Williams recommended that the clients invest in three high risk and unsuitable alternative investments, including Cion Investment Corp. Fund, FS Energy and Power Fund, and the Sierra Income Corp. These three alternative investments are business development companies (BDCs) that primarily make loans. Each one of these is a non-traded fund that is illiquid in other words, there is no ready market to sell them. However, Williams represented that these BDCs were conservative investments that would generate consistent income while preserving capital. Williams failed to adequately disclose that their illiquid nature of the BDCs and that they could lose a significant amount of their capital, amongst other things. The FS Energy and Power Fund is an energy-focused BDC and as such further increased the clients’ exposure to the energy sector thereby further increasing risk.
Williams also recommended high risk and unsuitable Unit Investment Trust (UITs). UITs are fixed baskets of securities held in a fund for a fixed duration. Williams sold the couple an investment in the Guggenheim Alternative Income Portfolio Series 12 UIT, which is a UIT that invested primarily in REITs, BDCs, and MLPs. The Guggenheim Alternative Income Portfolio Series 12 UIT was a high-risk investment that held risky securities that pay a rich commission.
Gregory Williams Customer Complaints
Gregory Williams has been the subject of eight customer complaints between 2009 and 2021, one of which was denied, according to his CRD report. Recent complaints are regarding:
April 2021. “The boilerplate allegations include breach of fiduciary duty, negligence and violation of state and federal securities laws between November 2013 and February 2021.” The customer is seeking $30,000 in damages. The complaint was regarding business development companies (BDCs) and took place while Gregory Williams was registered with Forta Financial Group.
October 2020. “The boilerplate allegations include breach of fiduciary duty, unsuitability, misrepresentation and negligence between November 2014 and September 2020.” The customer is seeking $250,000 in damages. The complaint was regarding corporate debt, mutual funds, unit investment trusts, and non-traded BDCs and took place while Gregory Williams was registered with Forta Financial Group.
October 2020. “The boilerplate allegations include breach of fiduciary duty, negligence and unsuitability, presumable between March 2012 and September 2020, though no dates were specified.” The customer is seeking $99,000 in damages. The case was regarding common and preferred stocks and took place while Gregory Williams was registered with Citigroup Global Markets Inc.
September 2020. “The boilerplate allegations include unsuitability, breach of fiduciary duty and negligence between August 2013 and July 2020.” The customer is seeking $500,000 in damages.
March 2020. “The allegations include unsuitability, breach of fiduciary duty, negligence, failure to supervise fraud and breach of contract for activities between January 2015 and March 2020.” The customer is seeking $500,000 in damages.
March 2019. “The statement of claim contained the standard boilerplate allegations including unsuitability, misrepresentation, negligence, fraud, breach of fiduciary duty and failure to supervise between April 2011 and December 2017.” The customer sought $578,821 in damages and the customer was granted $45,818.
June 2018. “Allegations include unsuitability, misrepresentation.” The customer is seeking $151,337 in damages and the case is currently pending. The case is regarding Debt-Corporate mutual funds and non-traded BDCs.
June 2018. “Allegations include unauthorized transfer, unsuitability, misrepresentations and omissions, failure to supervise, fraud, breach of fiduciary duty from May 2012 through March 2018.” The customer is seeking $1.2 million in damages and the case is currently pending. The case is regarding Debt-Corporate Equity-OTC, mutual funds, Unit Investment Trusts and non-traded BDCs.
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, Forta Financial Group, Inc. may be liable for investment or other losses suffered by Gregory Williams’ 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.