FINRA censured and fined VFG Securities, Inc. and additionally suspended VFG (Vanclef Financial Group) CEO Jason Bryce Vanclef of Culver City, CA, for making inaccurate and misleading claims concerning non-traded real estate investment trusts (REITs) and Direct Participation Programs (DPPs) in The Wealth Code: How the Rich Stay Rich in Good Times and Bad, a book written, published, and distributed by Vanclef and VFG.
The findings state that VFG Securities obtained 95% of its revenue from commissions on sales of non-traded REITs, DPPs, and other alternative investments, and that Vanclef used The Wealth Code - which FINRA said contained false, exaggerated, unwarranted, or misleading statements, and also omitted material facts - as sales literature to promote investments in those complex products.
Investigators said that in The Wealth Code, Vanclef repeatedly claimed that non-traded REITs and DPPs offer both high term return and capital preservation, which FINRA wrote was "inaccurate and misleading," and which additionally contradicted information within prospectuses for instruments that Vanclef and VFG sold, including the prospectus statement that non-traded DPPs and REITs are speculative instruments that contain a high degree of risk, including risk to a substantial portion or all of an initial investment.
Vanclef, in his book, claimed that non-traded DPPs and REITs afforded investors the opportunity to "get consistent returns" on investments that would provide "piece [sic] of mind."
Enforcement also wrote that Vanclef and VFG distributed recommendation spreadsheets that contained false and misleading liquidity timelines for non-traded DPPs and REITs, mischaracterized distributions as "income," and improperly projected the products' performance.
FINRA also determined that VFG distributed the book without having a principal at the firm review or approve it as sales literature, and did not submit it to FINRA's Advertising Department pursuant to NASD rules.
As such, investigators concluded that the firm's written supervisory procedures and systems were inadequate, and that VFG failed to reasonably supervise illiquid alternative investments, including the aforementioned non-traded DPP and REIT products, to ensure that customers did not become overly concentrated in illiquid securities.
If you have invested with Jason Bryce Vanclef or VFG Securities of Culver City, California, were misled by inaccurate information contained within Vanclef's The Wealth Code book, or were harmed by other false and misleading information concerning illiquid non-traded DPPs, REITs, and alternative investments, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.