Brokerage firm NEXT Financial Group has been fined $475,000 by the states of Massachusetts and New Hampshire for failure to supervise and comply with regulations related to sales of non-traded real estate investment trusts (REIT).
The Massachusetts Securities Division announced it reached a settlement where NEXT was ordered to pay $150,000. The penalty stems from sales practice violations and a failure to supervise operations (including allegedly unsuitable sales of REITs by an unidentified broker.)
The state of Massachusetts also alleged that some of the REIT sales exceeded limits as determined by a client’s overall liquid net worth.
New Hampshire Settles with NEXT Financial
Shortly after Massachusetts announced its fine, the New Hampshire Bureau of Securities Regulation announced it also settled with NEXT. According to official documents, the broker-dealer agreed to pay $235,000 and costs of $90,000 for inadequate supervision and unsuitable sales of non-traded REITs.
As part of both agreements, NEXT Financial also is obligated to offer solutions to clients, potentially adding to the cost of each of the above-mentioned regulatory matters.
NEXT Financial Confirms Steps to Fix the Issue
NEXT released a statement ensuring the public that it already was taking steps to remediate the situation and establishing stringent controls across the organization to prevent this from happening again.
NEXT Financial Broker Allegedly Sold Unsuitable Investments
According to official statements, the New Hampshire bureau received a complaint from a Massachusetts resident in 2017 alleging that Charles Chester Kulch, a NEXT Financial broker, had sold him unsuitable securities.
As part of the settlement agreement, NEXT also agreed that Mr. Kulch would work under heightened supervision and that he would be prohibited from selling REITs and other alternative investments.
Speak with a Securities Fraud Attorney
Dimond Kaplan & Rothstein, P.A. has vast experience with cases related to securities fraud or stockbroker misconduct. The firm has successfully represented numerous NEXT Financial customer who lost money as a result of various forms of broker and brokerage firm misconduct. If you are looking for a securities fraud attorney to review your rights and options, the securities fraud lawyers at Dimond Kaplan & Rothstein, P.A. represent individual and institutional investors across the United States who have lost money as a result of securities fraud or stockbroker misconduct. We will aggressively pursue claims to recover your losses or damages.
Contact Dimond Kaplan & Rothstein Today
Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. to schedule an appointment for a FREE case evaluation.
Our offices are located in Los Angeles, New York, Detroit, West Palm Beach, Naples and Miami, and we represent clients nationwide. Translations services are available.
