Megurditch Mike Patatian, Formerly of Western International Securities, Charged by FINRA with Unsuitable Investment Recommendations

Patatian is accused of recommending unsuitable non-traded REITs to customers. 

Megurditch Mike Patatian (CRD#: 4047060) was most recently registered as a broker with Supreme Alliance LLC from May 2020 until March 2021. Previously, Patatian was registered as a broker with Western International Securities from April 2013 until April 2020. 

Patatian has thirteen disclosures on his BrokerCheck report. Six customer disputes filed against Patatian were denied.

February 2021 Regulatory Judgment

• Status: Pending
• Initiated By: FINRA
• Allegations: Patatian was named a respondent in a FINRA complaint alleging that he made recommendations to customers to purchase non-traded real estate investment trusts (REITs) that were unsuitable because he lacked a reasonable basis to recommend the product to any investor. The complaint alleges that Patatian did not understand the basic features and risks associated with the non-traded REITs and failed to conduct reasonable diligence to understand the product. Some of Patatian’s customers also had liquidity concerns and thus his recommendation to purchase an illiquid non-traded REIT was further unsuitable due to each customer’s specific situation and needs. The complaint also alleges that Patatian caused customers to incur taxes and surrender fees by recommended that the customers surrender existing variable annuity policies when he failed to understand the adverse financial consequences of the surrenders. The complaint further alleges that Patatian recommended variable annuity exchanges that were unsuitable because he failed to understand the consequences of those exchanges, including the increased cost of the new variable annuities and the fact that a return of premium death benefit was not a standard feature of all variable annuities. In addition, the complaint alleges that without a customer’s knowledge or consent, Patatian impersonated the customer in a telephone call with an insurance company to obtain the contract value and surrender fee for the variable annuity. Moreover, the complaint alleges that Patatian recorded inaccurate customer information on his member firm’s customer account and disclosure forms, including by overstating customers’ net worth and exaggerating customers’ years of investment experience. Notably, the state of the California and the REIT issuers limited the total purchase of a REIT to 10 percent of the customer’s net worth. In some instances, Patatian inflated the customer’s net worth on the firm’s REIT paperwork in order to evade the limits.

March 2020 Employment Separation After Allegations

• Firm Name: Newbridge Securities Corporation
• Termination Type: Permitted to Resign
• Allegations: Rep failed to disclose arrest information during pre-hire process.
• Broker Comment: I was NOT arrested. I was detained and cited a ticket (citation) and released at the scene. This was NOT a reportable event. It was a misdemeanor. I pleaded not guilty. This was a misdemeanor. On Newbridge Securities Pre-Hire forms, I answered ALL their questions honestly. I learned about this termination disclosure “this week”.

June 2017 Customer Dispute

• Status: Settled
• Allegations: Customer claimed he received bad advice.
• Settlement Amount: $30,000.00

October 2015 Customer Dispute

• Status: Settled
• Allegations: Client claims that she did not fully understand her VA investment at the time of purchase through a former CFS representative in December of 2011. Client alleges that she was not properly informed as to investment risk and product details and now has an immediate need for the invested principal requiring full surrender. A CFS review confirmed that all material product features and required disclosures were made both verbally and in writing as evidenced on signed documentation. As of this filing date, CFS continues to review and discuss options for resolution with the client. Accommodation settlement with client for surrender charges incurred in the amount of $492.35 as the result of a partial surrender of VA in January of 2015. Client confirmed satisfaction with reexplanation of VA and working relationship with new advisor at branch and will continue to maintain investment.
• Damage Amount Requested: $11,300.00
• Settlement Amount: $492.35
• Broker Comment: Here is another baseless complaint that was likely encouraged and orchestrated by CUSO Financial after my departure. CUSO Financial will certainly and promptly deny this claim because it is indeed groundless and without any merit. The client understood and signed all of the required disclosures and paperwork many years ago. The investment has appreciated in value significantly based upon my investment recommendations and she has ample liquidity built within the investment.

March 2013 Employment Separation After Allegations

• Firm Name: CUSO Financial Services, L.P.
• Termination Type: Permitted to Resign
• Allegations: Failure to follow policy with regards to firm transaction documentation.

August 2008 Customer Dispute

• Status: Settled
• Allegations: The client purchased a VA through CFS representative Patatian in May 2008. At the time of purchase the client had previous investment experience including variable annuities, and she indicated that she had a growth objective, a medium risk tolerance[,] and a time horizon of 5-10 years with no plans to take withdrawals. The client affirmatively elected to invest in separate accounts rather than invest in the 1-year fixed account until the end of the 30 day right to examine period. She surrendered during the free-look period and alleged an $11,715.00 market loss. On or around July 12, 2008, the client indicated that her sole reason to exercise the free-look was “because the account went down” in value. The purchase of the VA was suitable for the client and we deny any wrongdoing.
• Damage Amount Requested: $11,715.00
• Settlement Amount: $8,786.30
• Broker Comment: As part of the settlement agreement reached by the client and CFS, the client agreed that payment was not to be construed to be an admission of any wrongdoing or liability on the part of CFS or its agents. 

February 2004 Employment Separation After Allegations

• Firm Name: WMFinancial Services, Inc.
• Termination Type: Discharged
• Allegations: Employment was terminated due to inconsistencies in statements provided to regional sales manager.
• Broker Comment: The transaction that led to the termination was approved by the WMFS Compliance Department. The client’s nephew was present at all meetings with the client. The accusation was made by the nephew, who is not named on the account, and not the actual client. There were no losses or damages that resulted from this transaction.

Contact Us Today

The Sonn Law Group is currently investigating allegations surrounding Megurditch Mike Patatian. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.