Newbridge Could Face Philadelphia Public Employee Suits Alleging Millions in Damages

Already under fire for dishonest and unethical practices, an InvestmentNews report suggests that Newbridge Securities Corp could be the subject of several dozen investor complaints from Philadelphia public employees alleging that the firm is liable for millions in damages from the sale of non-traded real estate investment trusts (REITs) associated with American Realty Capital chair Nicholas Schorsch.

In June 2017, a federal jury found American Realty Capital Properties, Inc. CFO Brian S Block guilty of REIT-related securities fraud concerning the sales of Schorsch's ARCP REIT product, later known as VEREIT. The official release noted that Block's conviction included conspiracy to commit securities fraud, securities fraud, making false filings with the SEC, and submission of false certifications. AR Capital Properties former Chief Accounting Officer Lisa Pavelka McAlister also pleaded guilty to securities fraud and related charges.

One month later, the Pennsylvania Department of Banking and Securities fined broker Austin Richard Dutton Jr $200,000 and Newbridge Securities $499,000 for dishonest and unethical practices in recommending that a customer purchase, sell, or exchange ARC-managed REITs without reasonable grounds to as to its suitability.

The present InvestmentNews article tells the story of several clients who had more than 50% of their lump sum retirement benefits invested in the illiquid ARC REITs, as well as a second problematic REIT sponsored by United Development Funding (UDF), which FBI officials raided in 2016 and said operated like a Ponzi scheme.

For instance, the UDF shares and the UDF IV REIT dropped dramatically in value after a short-seller accused UDF of Ponzi-like features, alleging that UDF may have overstated profits while failing to portray loan losses. Said one analyst, "Total Ponzi Scheme, Worth Zero."

If you have invested with Newbridge Securities Corp or with any broker or financial adviser who has unsuitably recommended transacting in a complex securities product, such as Nicholas Schorsch's American Realty Capital or the United Development Funding REITs, and these illiquid products have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

Related Posts
  • Pasadena-Based Western International Securities Fined $400k for Deficient REIT Supervision Read More
  • FINRA Slams Anaheim's Centaurus Financial for Supervisory Failure, Allowing Broker Donnie Ingram to Hire His Own Supervisor Read More
  • Megurditch Patatian Barred for $8 Million of Unsuitable REIT & Variable Annuity Recommendations Read More