Cetera B-D on hook for $2.66 million arbitration claim stemming from REITs, annuities
In an unusual aspect of the investors' claim and subsequent award against First Allied Securities, the $2.66 million in damages requested matched the amount the three arbitrators awarded.
First Allied Securities Inc. lost a Finra arbitration claim Friday to two investors who received $2.66 million in damages stemming largely from the sale of nontraded real estate investment trusts and annuities.
The two claimants, Nancy and Ivan Mailhot, filed the claim against First Allied and two other broker-dealers in 2018, alleging negligence, misrepresentation, failure to supervise and other charges in the matter, according to the Financial Industry Regulatory Authority Inc. arbitration panel award.
Only First Allied Securities, which is one of the Cetera Financial Group broker-dealers, was listed as responsible for damages to the Mailhots, according to the panelists’ decision, which gave no explanation for the award.
A spokesperson for Cetera Financial Group declined to comment Monday. An attorney for the Mailhots, Gary Menzer, did not return a call to comment.
In an unusual aspect of the investors’ claim and the subsequent award, the $2.66 million of damages requested matched the amount the three arbitrators awarded. Most awards pay claimants a percentage of the amount requested.
The investors’ claim centered on high commission products, nontraded REITs and annuities. Of the 12 investments listed in the award, six were REITs and four were annuities.
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