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Investor Alert: Former Voya Financial Advisors, Inc. Broker James Flynn Alleged to Recommend Unsuitable REITs and Illiquid Investments

Posted on Tuesday, October 1st, 2019 at 1:54 pm    

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Did former Voya Financial Advisors, Inc. broker James Flynn (CRD# 3082615) recommend you unsuitable REITs and illiquid investments? According to reports in a local newspaper, in September 2020, Flynn has fled the country and may be in the Caribbean. 

Flynn was registered with IFS Securities in Greenville, South Carolina from February 2017 to February 2018, when he was terminated regarding, “Client alleges trading ahead of authorization.” 

Previously, Flynn was registered with Voya Financial Advisors, Inc. in Greenville, South Carolina from 2013 to 2017, when he was terminated regarding, “The representative provided misleading information to the Firm during a complaint investigation.”

Flynn allegedly sold his customers non-traded real estate investment trusts (REITs) and other illiquid investments, which were offered by Phillips Edison and Business Development Company of America. 

In September 2018, FINRA barred Flynn after he failed to request termination of his suspension within three months of the date of the Notice of Suspension.

In September 2018, FINRA barred Flynn after he failed to request termination of his suspension within three months of the date of the Notice of Suspension.

A REIT is a company, modeled after mutual funds, that owns or finances income-producing real estate and provide investors of all types regular income streams, diversification and long-term capital appreciation. Unlike other real estate investments, REITs are often entirely illiquid. Non-traded REITs hold additional risks for investors because they often feature limited redemption programs, high fees and commissions, and internal conflicts of interest. Unlike stocks on the New York Stock Exchange, REITs are not publicly traded and cannot be sold through an exchange, only through secondary market auctions. 

According to a report earlier this week in The Post and Courier of Greenville, Flynn is “believed to be living outside the country,” and he has been the target of 57 investor complaints since 2013, of which 25 have been settled for a total of more than $3.5 million. Twenty-one investor lawsuits remain pending and are currently going through the stages of Finra arbitration.

Flynn has been the subject of 57 customer complaints between 2015 and 2020, seven of which were denied, one was withdrawn and three were closed without action, according to his CRD report. Twenty-five of those customer complaints were settled for more than $3.5 million in total. A sampling of complaints include:

July 2020. “Statement of Claim allegations include risky, unsuitable, illiquid alternative investments were recommended to claimants.” The customer is seeking $5 million in damages. 

July 2020. “Allegations include representative recommended and implemented a high commission paying, illiquid, and generally unsuitable investment strategy without consideration of personal objectives.” The case is currently pending. 

June 2020. “Customer alleges financial information found on account documents was fictitiously stated in Aug. 2015.” The customer is seeking $275,000 in damages in this pending complaint. 

January 2020. “Allegations include unsuitable investment recommendations, misrepresentations and omitting material information.” The customer is seeking $350,000 in damages. 

January 2020. “Statement of claim allegations include representative sold a portfolio of high commission, illiquid and speculative financial products to claimants.” The customer sought $1 million in damages and the case was settled for $420,000.

January 2020. “Allegations include paperwork submitted to Firm reflected more assets than customer had resulting in investments that they were not qualified for.” The customer is seeking $210,750 in damages. 

December 2019. “Customer alleges too much was invested in REIT products due to his net worth being overstated on account documents.” The case is currently pending. 

December 2019. “Allegations include that illiquid real estate investments were not suitable for the customer’s financial condition.” The client is seeking $8,000 in damages. 

November 2019. “Allegations include misrepresentation, misleading investment guarantees, exaggeration of financial information and overall unsuitable investment.” The case is currently pending. 

November 2019. “Allegations include misrepresentation, misleading investment guarantees, exaggeration of financial information and overall unsuitable investment.” The case is currently pending. 

November 2019. “Allegations include various alternative, illiquid and unsuitable securities were recommended by the representative(s).” The client is seeking $100,000 in damages. 

November 2019.Allegations include recommendations were made for unsuitable and illiquid securities.” The client sought $100,000.01 in damages and the case was settled for $300,000.

October 2019. “Allegations include various alternative, illiquid and unsuitable securities were recommended by the representative(s).” The client is seeking $100,000 in damages. 

September 2019. “Allegations include various alternative, illiquid and unsuitable investments were recommended by representative.” The client is seeking $100,000 in damages. 

August 2019. “Allegations include unsuitable investments were sold to claimants who are unsophisticated investors, risks were not aligned with their objectives, material risks were not disclosed, and the investments were overconcentrated.” The case was settled for $100,000.

August 2019. “Allegations include unsuitable investments were sold to claimants who are unsophisticated investors, that risks were not aligned with their objectives, material risks were not disclosed, and the investments were overconcentrated,” The case was settled for $245,000.

May 2019. “Allegations include claimants were sold a portfolio of unsuitable high-commission, illiquid and speculative financial products.” The customer sought $100,000 in damages and the case was settled for $65,000.

May 2019. “Allegations include misrepresentation of facts, exaggeration of financial information, and that documents were not signed in state indicated on application signed in Aug. 2016.” The customer sought $400,000 in damages and the case was settled for $201,750.

April 2019. “Allegations include misrepresentation and suitability related to the alternative/illiquid securities that were recommended.” The customer sought $100,000 in damages and the case was settled for $107,500.

April 2019. “Allegations include recommendations were made for unsuitable and illiquid securities.” The customer sought $1 million in damages and the case was settled for $750,000.

March 2019. “Allegations within the statement of claim include customer was advised to liquidate entire portfolio and invest in unsuitable, high risk, high fee, and illiquid investments.” The case is currently pending. 

March 2019. “Allegations include investments recommended in May 2015 were not suitable for customer due to age at purchase and customer was not informed investment was not liquid and could not be actively traded.” The case is currently pending. 

December 2018. “Statement of claim includes misrepresentation and unsuitable investments.” The customer sought $100,000 in damages and the case was settled for $145,000.

September 2018. “Allegations include improper sales of alternative investments, common law fraud and negligent misrepresentation.” The customer is seeking $100,000 in damages and the case was settled for $125,000.

May 2017. “Customer questioned suitability of REIT investments and the replacement of a variable annuity policy. REITs were purchased in 2014 and 2015.” The customer sought $115,000 in damages and the case was settled for $167,673.17.

March 2017. “Customer alleges trading activity in January 2017 was not authorized.” The case was settled.

December 2016. “Customer alleges they should not have been allowed to invest all retirement funds into Prudential annuities in 2010 and REIT type investments should not have been recommended/purchased in 2015 with proceeds of surrendered annuity due to age.” The case was settled for $196,788.18.

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, Voya Financial Advisors, Inc. may be liable for investment or other losses suffered by Flynn’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.