Erez Law Investigates Claims Related to RBC Capital Markets, LLC Financial Advisor Samuel Kluft Koltun Regarding Puerto Rico Bonds
Posted on Wednesday, March 1st, 2017 at 7:57 pm
Erez Law is currently investigating claims related to RBC Capital Markets, LLC broker Samuel Kluft Koltun (CRD# 1739664) regarding numerous customer complaints alleging that he recommended an overconcentrated portfolio of unsuitable Puerto Rico bonds. Koltun has been in the financial services industry for 29 years and has been registered with RBC Capital in West Palm Beach, Florida since 2009.
Puerto Rico suffers from long-term financial and economic deficiencies that rendered its credit increasingly more speculative. The deterioration of Puerto Rico’s financial condition culminated in its debt being downgraded to junk status or speculative (below investment grade) in 2014. While they carry a relatively higher risk of default or devaluation, junk bonds’ draw for investors lies in the fact that they can deliver significantly higher yields than safer, investment grade bonds. Many brokerage firms and advisors downplayed the risks associated with the bonds, omitted the risks entirely, and to over-concentrated investor assets in these government bonds.
According to his CRD, Koltun has been the subject of six customer disputes, dating from 2000 to 2016:
September 2016. “Clients alleged broker recommended over-concentration in unsuitable Puerto Rico bonds, in period 2012 to 2015.” The customer requests $80,000 in damages.
April 2016. “Client alleges recommendations of unsuitable and over-concentrated Puerto Rico bonds in her account, in period 2011 to 2015.” The customer requests $260,000 in damages.
October 2015. “Claimants allege that their account was over-concentrated in Puerto Rico bonds and that the risks associated with this investment were not disclosed, in the period 2008 through 2015.” The customer requests $750,000 in damages.
October 2015. “Claimants allege that their accounts were over-concentrated in Puerto Rico bonds and that the risks associated with this investment were not disclosed, in the period 2010 through 2015.” The customer sought $655,000 in damages and the case was settled for $399,000.
March 2003. “Client alleged that mutual funds she purchased in 2000 were unsuitable.” The customer sought $100,000 in damages but the case was closed without action.
June 2000. “Claimant alleged common law fraud, negligent misrepresentation, breach of fiduciary duty, & violation of Chapter 517, Florida statutes relating to purchases made in July 1999.” The customer sought $15,000 in damages and the case was settled for $95,000.
Additionally in August 2004, Kolton was the subject of a suspension from NASD. According to the Letter of Acceptance, Waiver, and Consent that Koltun signed, he was fined $12,500, including disgorgement of $7,864.14 in commissions, and suspended from association with any NASD member for 10 business days. The AWC alleged that Koltun recommended numerous Class B mutual fund transactions to customers that were unsuitable for the customers, in situations where Class A shares should have been recommended instead. In these instances, if Class A shares had been recommended, the customers would have been eligible to receive breakpoints on their purchases, paid lower fees, and avoided deferred sales charges.
Erez Law represents investors in the United States and Puerto Rico for claims against RBC Capital Markets, LLC broker Samuel Kluft Koltun, who is alleged to overconcentrate customer investment portfolios in high risk and unsuitable Puerto Rico bonds.
A broker must have reasonable grounds for each recommendation made to investors considering such factors as the customer’s other securities holdings, financial situation, and risk tolerance. In addition, before a firm offers a security to its customers, the firm must conduct due diligence, investigating the facts surrounding the security, to confirm that it is suitable for any customer of the firm. The suitability of an investment for a particular individual is at the center of the investment process and one of the key fiduciary duties owed by a firm and its broker to the customer. A firm may be held liable for its failure to recommend suitable investments to its customers.
In addition, 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, RBC Capital Markets, LLC may be liable for investment or other losses suffered by Koltun’s customers.
If you were a client of RBC Capital Markets, LLC broker Samuel Kluft Koltun, and have experienced investment losses or financial irregularities, please call us at 888-840-1571 or complete our “contact form.” Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies.