FINRA filed a complaint against former Western International Securities broker Megurditch Mike Patatian in which Enforcement charged Patatian with making scores of unsuitable recommendations that customers purchase risky non-traded real estate investment trusts (REITs) without a reasonable basis to recommend the product and without an understanding of a REIT's basic features and risks. Furthermore, FINRA found that Patatian recommended several customers finance the unsuitable REIT purchases with additionally unsuitable variable annuity (VA) surrenders.
According to FINRA's Complaint #2018057235801, Patatian (CRD #4047060), while associated with Western International Securities in Westlake Village, California, made 81 recommendations to 59 customers to purchase non-traded REITs, all of which were unsuitable because of the lack of a reasonable basis to recommend the product to any investor.
Investigators found that six of Patatian's customers had specific liquidity concerns that conflicted with Patatian's recommendation to purchase an illiquid non-traded REIT.
The findings state that Patatian recommended some of his customers surrender existing variable annuity policies and that each sell recommendation was unsuitable because of adverse financial consequences posed by the early surrenders, including taxes and surrender fees.
In addition to VA surrenders, Patatian purportedly recommended several customers exchange their variable annuity policies, which FINRA deemed were similarly unsuitable recommendations.
Finally, FINRA accused Patatian of impersonating a customer without the customer's knowledge or consent in a telephone call with an insurance company to further such a variable annuity surrender/transaction, recorded inaccurate customer information on firm forms by overstating customers' net worth and years of investment experience in order to evade detection and limits that are set by the State of California, and further falsified account and disclosure forms.
For example, the Complaint states that Patatian wrote on one such new account form that a customer had 20 years of experience investing in stocks, bonds, and mutual funds when, in fact, she had none.
Patatian presently holds an investment adviser registration with Supreme Alliance LLC in Granada Hills, California.
If you have invested with ex-Western International Securities representative Megurditch Mike Patatian or with any stockbroker or financial adviser who unsuitably recommended you purchase or invest in risky illiquid products not suitable for your investment profile or objectives, such as a non-traded real estate investment trust (REIT), or has unsuitably recommended you surrender variable annuity policies or similar long-term horizon products, resulting in financial harm due to surrender/sales fees and charges, or other losses, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.