Did You Lose Money Investing in REITs with Former Newbridge Securities Corporation Financial Advisor Austin Dutton Jr.?
Posted on Wednesday, February 21st, 2018 at 9:23 am
Erez Law is currently investigating former Newbridge Securities Corporation financial advisor Austin Dutton Jr. (CRD# 2739167) regarding recommending unsuitable non-traded real estate investment trusts (REITs). Dutton has been registered with Sandlapper Securities, LLC in Doylestown, Pennsylvania since September 2017. Previously, he was registered with Center Street Securities, Inc. in Doylestown, Pennsylvania from July to September 2017 and with Newbridge Securities Corporation in Doylestown, Pennsylvania from 2007 to 2017.
Newbridge Securities Corporation now faces two dozen suits from police, firemen and other Philadelphia public employees alleging millions in damages from the sale of illiquid non-traded REITs managed by Nicholas Schorsch (the REIT czar) through the real estate investment company he controlled American Realty Capital; the REITs were then sold by Dutton. It is alleged that Dutton marketed to police, fireman and other public employees through his firm, Bridge Valley Financial Services, and invested 50% of a lump sum retirement benefit in the illiquid REITs from American Realty Capital.
In July 2017, the Pennsylvania Department of Banking and Securities fined Newbridge Securities Corporation $499,000 for failing to supervise an unnamed broker, Dutton, in connection with sales of structured products to his clients in the state. In October 2017, Newbridge Securities Corporation announced that it would be acquired by the London-based European Wealth Group. The Pennsylvania Department of Banking and Securities also sanctioned Dutton to $200,000 in civil and administrative penalties and fines, alleging that he engaged in dishonest or unethical practices by recommending the purchase of a security to at least one customer without reasonable grounds to believe that the transaction would be suitable for the customer.
Additionally, Dutton sold non-traded real estate investment trusts (REITs) managed by American Realty Capital (ARC), now AR Global, which were sold to police officers and city employees in Philadelphia. According to InvestmentNews, “The accounting scandal at the REIT, ARCP, resulted in its former chief accounting officer, Lisa McAlister, pleading guilty last summer to securities fraud. Last month, the ex-chief financial officer of ARCP, Brian Block, was found guilty of securities fraud in a jury trial in New York.”
Dutton has been the subject of two customer complaints between 2004 and 2017, one of which was closed without action, according to his CRD report:
December 2017. “Claimants allege unsuitable securities, misrepresentations and omissions of material facts concerning the risks and features of the securities.” The customer is seeking $30,000 in damages and the case is currently pending.
December 2017. “Claimants allege unsuitble securities, misrepresentations and omissions of material facts concerning the risks and features of the securities.” The customer is seeking $150,000 in damages and the case is currently pending.
December 2017. “Claimants allege unsutiable securities, misrepresentations and omissions of material facts concerning the risks and features of the securities.” The customer is seeking $230,000 in damages and the case is currently pending.
November 2017. “Violations of Federal Securities Laws, The Pennsylvania Securities Act, The Pennsylvania Unfair Trade Practices and Consumer Protection Act, sale of Unsuitable Securities, Negligence, Common Law Fraud, Breach of Fiduciary Duty and Failure to Supervise.” The customer is seeking $350,000 in damages and the case is currently pending.
April 2015. “Claimant alleges misrepresentations and omissions, breach of fiduciary duty, negligence, breach of contract and failure of supervision.” The client sought $111,912 in damages and the case was settled for $14,999.
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, Newbridge Securities Corporation may be liable for investment or other losses suffered by Dutton’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.