Purshe Kaplan Sterling Investments Complaints: Information for Investors

Purshe Kaplan Sterling Investments (CRD#: 35747) is based in Albany, New York, and is licensed to operate in all 50 U.S. states and in the District of Columbia.

At Sonn Law Group, we are committed to fighting for the legal rights and financial interests of investors.

Here, our top-rated securities fraud attorneys highlight notable complaints and industry sanctions that have been brought against Purshe Kaplan Sterling Investments.

Purshe Kaplan Sterling Investments: Customer Disputes and Regulatory Actions

Non-Traded Real Estate Investment Trusts (REITs)

In February of 2017, the Financial Industry Regulatory Authority (FINRA) found that:

Purshe Kaplan Sterling Investments had improperly sold complex non-traded Real Estate Investment Trusts (REITs) to an unidentified Native American tribe. These REITs were sold to the client through Purshe Kaplan Sterling’s registered broker Gopi Krishna Vungarala (CRD No. 4856193).

According to FINRA, this broker repeatedly failed to apply eligible sales discounts related to these transactions. FINRA ordered the brokerage firm to pay the tribe more than $3.3 million in financial restitution along with an additional $750,000 in interest. Without admitting to or denying the misconduct, Purshe Kaplan Sterling Investments consented to the penalties.

Inadequate Due Diligence Regarding Brokers’ Outside Business Activities

In May of 2016, Purshe Kaplan Sterling Investments was censured and fined $200,000 for failing to properly supervise the outside business activities of its registered brokers. Under FINRA Rule 3270, individual brokers have a professional duty to disclose any and all outside business activity, and registered brokerage firms have a legal duty to monitor these activities.

This rule is extremely important, as it helps to ensure that a firm’s brokers are not engaging in outside business conduct that would create a conflict of interest with the firm’s customers. In this case, FINRA investigators found that Purshe Kaplan Sterling Investments was allowing its brokers to engage in outside business transactions, without actually requiring its brokers to submit financial disclosures for review. This is a direct violation of FINRA Rule 3270.

Unsuitable Investment Recommendations

In February of 2011, this brokerage firm was censured and fined $100,000 for recommending unsuitable investments to certain clients. Specifically, customers of the firm were encouraged to purchase high-cost variable annuities.

By failing to review these transactions to ensure suitability, the firm put its clients at financial risk. Brokers and broker-dealers must always ensure that they are only selling their clients investments that are truly appropriate for their individual needs.

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