J.P. Turner & Co, recently acquired by Cetera, has over 360 registered representatives and over 150 branch offices nationwide. J.P. Turner’s history with securities regulators is substantial. For example, in December 2013, J.P. Turner consented to a sanction consisting of a censure and restitution in the amount of almost $1 million for the failure to establish and maintain a supervisory system reasonably designed to monitor transactions in leveraged, inverse, and inverse-leveraged Exchange-Traded Funds and for making unsuitable recommendations of these of Non-Traditional ETFs to its customers.
In June 2009, J.P. Turner consented to a sanction consisting of more than $500,000 in connection with its failure to establish and implement policies and procedures reasonably designed to detect and cause the reporting of suspicious transactions, and in October 2008, consented to a hefty fine and sanction for the failure to have a supervisory system reasonably designed to ensure that its registered representatives charged its customers reasonable markups and commissions on equity securities transactions.
On August 25, 2015, J.P. Turner was fined and censured again, this time for the failure to apply volume discounts to certain customers’ eligible purchases of non-traded real estate investment trusts (“REITs”) and business development companies (“’BDCs”) in violation of FINRA Rules or have in place an effective supervisory system and written supervisory procedures reasonably designed to ensure that its customers received appropriate volume discounts on eligible purchases of non-traded REIT and BDCs.
What is a REIT?
A REIT is a corporation, trust or association that owns or manages income-producing real estate. There are two types of public REITS: those that trade on a national securities exchange and those that do not trade on a national securities exchange. REITs in this latter category, are generally referred to as publicly registered non-exchange traded REITs, or simply, non-traded REITs.
What is a BDC?
A BDC is a closed-end investment company that invests in private or thinly traded public companies. As with non-traded REITS, non-traded BDCs are not traded on a national securities exchange. Non-traded REITs and BDCs may offer volume discounts to investors. A volume discount is a discounted price per share received by the investor when the investor reaches an accumulated level of investment. The manner in which an investor can obtain a volume discount is set forth in the offering’s prospectus. The discount is funded by reducing the selling commission paid by the investment product’s wholesaler to the broker-dealer.
FINRA’s Findings
During the Relevant Period, FINRA found that J.P. Turner failed to identify and apply volume discounts to certain customers’ eligible purchases of non-traded REITs and BDCs and also during same period, J.P. Turner failed to establish, maintain and enforce a supervisory system and written supervisory procedures with respect to the sale of non-traded REITs and BDCs.
By their very nature, non-traded REITs and BDCs are illiquid and are highly risky securities which are inappropriate for most investors.
Customers suffering losses as the result of the recommendation and sale of these securities may be able to recover their investment losses, and ought to consult with counsel to determine their legal rights and remedies.
Guiliano Law Group
Our practice is limited to the representation of investors in claims, for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost to unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.
