Charles Chester Kulch of Nashua, New Hampshire, a stockbroker formerly registered with Next Financial Group Inc., has been barred by Massachusetts Securities Division from being a stockbroker supported by allegations of Kulch making unsuitable recommendations to customers on variable annuities and non-traded real estate investment trusts. In the Matter of Charles C. Kulch Docket No. E-2017-0079 (June 1, 2021).
According to the Securities Division, customers’ accounts were overconcentrated by Kulch in risky, illiquid, and expensive investments, including variable annuities and REITs. Kulch allegedly used a basic scheme to get customers to buy the investments for long-term investing. He made hundreds of thousands in commissions while customers experienced losses.
The Division states that Kulch knew about Next Financial Group’s limitations relating to how much an investor could allocate in non-traded REITs. Kulch knew of a limit of five percent of a customer’s liquid net worth for any one product and twenty percent of a customer’s liquid net worth for all of a customer’s alternative investments. Kulch did not follow the company’s guidelines; he instead had customers invest more of their liquid net worth in transactions for an apparent future retirement income stream.
The regulator additionally states that Kulch had customers invest in inappropriate variable annuities with high commissions and long surrender charges. Kulch allegedly brought in over $1,000,000.00 in commissions from annuity and REIT sales.
Kulch has been identified in eleven customer initiated investment related disputes containing accusations of conduct during the time that he was employed by securities broker-dealers which include Next Financial Group and Investors Capital Corp. FINRA Public Disclosure shows that Kulch is identified in a customer initiated investment related FINRA securities arbitration claim which was settled for $120,000.00 in damages supported by allegations of Kulch selling poorly performing real estate investment trusts for the customer’s Investors Capital Corp account.
Another customer filed an investment related complaint involving Kulch’s activities in which the customer requested $150,000.00 in damages based upon accusations that they were placed into unsuitable real estate securities because of Kulch, as those investments conflicted with the customer’s risk tolerance when Kulch was associated with Next Financial Group and Investors Capital Corp.
Another customer initiated investment related FINRA securities arbitration claim regarding Kulch’s conduct was resolved for $14,999.00 in damages founded on allegations that the customer was placed into unsuitable non-traded REITs because of Kulch while he was registered with Next Financial Group. FINRA Arbitration No. 20-03499 (September 21, 2020).
Kulch is also the subject of a customer initiated investment related FINRA securities arbitration claim which was settled for $18,000.00 in damages supported by accusations of unsuitability relating to the REITs Kulch recommended while at NEXT Financial Group. FINRA Arbitration No. 20-03496 (August 11, 2021). He is referenced in a different customer initiated investment related FINRA securities arbitration claim which was resolved for $35,000.00 in damages based upon allegations of inappropriate non-traded REITs sold through Kulch and Next Financial Group. FINRA Arbitration No. 20-02779 (August 12, 2021).
Another customer initiated investment related FINRA securities arbitration claim concerning Kulch’s activities was settled for $30,000.00 in damages founded on accusations of unsuitable trading in the customer’s account between August 2012 and February 2016 during the time that Kulch was employed by Next Financial Group. FINRA Arbitration No. 20-02852 (August 12, 2021).
Kulch is also referenced in a customer initiated investment related FINRA securities arbitration claim which was resolved for $17,500.00 in damages founded on allegations that unsuitable real estate investment trusts (REITs) were sold by Kulch from September 2015 to June 2020 when Kulch was employed by Next Financial Group. Financial Industry Regulatory Authority (FINRA) Arbitration No. 20-04073 (August 25, 2021). The claim alleges that Kulch placed the customer in non-traded REITs resulting in damages.
Kulch was associated with Next Financial Group between October 19, 2006, and June 24, 2020.