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David Lerner Associates, Inc. Broker Charles Bonilla Energy Sector Loss Options

Posted on Tuesday, February 23rd, 2021 at 6:52 pm    

David Lerner Associates

Erez Law is currently investigating former David Lerner Associates, Inc. broker Charles Bonilla (CRD# 2572107), who was recently suspended by FINRA. It is alleged that Bonilla recommended illiquid investments tied to the high-risk energy sector to customers of David Lerner Associates, Inc.

It is alleged that David Lerner Associates, Inc. brokers recommended their clients invest in non-public limited partnerships, including Energy Eleven (Energy 11), LP and Energy Resources 12, as well as the Spirit of America Energy (SOAEX) mutual fund, many of which were not suitable for many investors.

In February 2021, FINRA suspended Bonilla for five months and sanctioned him to pay a $5,000 civil and administrative penalty and fine and $22,417.03 in disgorgement. According to the Acceptance, Waiver & Consent (AWC), “Bonilla consented to the sanctions and to the entry of findings that he recommended that his customers invest in securities without having a reasonable basis to believe those investments were suitable. The findings stated that Bonilla recommended investments in a mutual fund created for customers of his member firm. Bonilla did not perform reasonable diligence on the fund prior to recommending it to customers. Bonilla could describe little about the fund’s underlying holdings, beyond that some of the holdings were midstream energy companies. Bonilla did not know how the fund paid its monthly distributions or what, if any, diligence his firm performed on the fund or its holdings prior to offering shares of the funds to customers. Without sufficient understanding of these fundamental features or risks of the fund, Bonilla recommended that his customers collectively invest over $250,000 in the fund, for which he received $4,355.72 in commissions. The fund’s net asset value declined by more than 40%. Bonilla also recommended illiquid investments in a limited partnership sold to customers of his firm. Bonilla did not perform reasonable diligence on the partnership prior to recommending the investment to customers. Bonilla did not know how the partnership generated funds to pay investors monthly distributions or how the price of the common units reflected on customer account statements were calculated. Bonilla did not real the full prospectus nor did he review the partnership’s financial statements. Without a sufficient understanding of fundamental features and risks of the partnership, Bonilla recommended that his customers collectively invest over $650,000 in the partnership, for which he received $18,061.31 in commissions. Later, the partnership notified its common unit holders that it was suspending distributions until further notice.”

According to the FINRA AWC, “Between December 2015 and December 2017, while associated with David Lerner Associates, Bonilla recommended that his customers invest in energy sector securities without having a reasonable basis to believe those investments were suitable. Due to Bonilla’s failure to conduct reasonable diligence, there were potential risks and costs of the investments, among other things, that Bonilla did not adequately understand.”

Bonilla was registered with Pruco Securities, LLC in Boca Raton, Florida from 2018 to 2019 and with David Lerner Associates, Inc. in Boca Raton, Florida from 2015 to 2018. Prior to that, Bonillas was registered with Scottrade, Inc. in Aventura, Florida from 2008 to 2015, when he was terminated regarding, “Mr. Bonilla was discharged after the firm determined he engaged in a business activity without receiving proper approval prior to the business activity.”

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, David Lerner Associates, Inc. may be liable for investment or other losses suffered by Bonilla’s customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and 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.