Customer alleges that an investment recommendation was unsuitable and misleading. Investments purchased from 2013 to 2014.

$5,000.00

Customer alleges that an investment recommendation was unsuitable and misleading. Investments purchased from 2013 to 2014.

$5,000.00

Customer alleges that an investment recommendation was unsuitable.

$5,000.00

Customer alleges that an investment recommendation was unsuitable and misleading.

$5,000.00

Customer alleges that an investment recommendation was unsuitable.

$5,000.00

Customer alleges that an investment recommendation was unsuitable.

$5,000.00

Customer alleges that an investment recommendation was unsuitable.

$5,000.00

Customer alleges that an investment recommendations were unsuitable.

$5,000.00

Customer alleges that an investment recommendation was unsuitable.

$1,000,000.00

Customer alleges that an investment recommendation was unsuitable.

$75,000.00

Customer alleges that an investment recommendation was unsuitable.

$200,000.00

FINRA

Patatian was named a respondent in a FINRA complaint alleging that he made recommendations to customers to purchase non-traded real estate investment trusts (REITs) that were unsuitable because he lacked a reasonable basis to recommend the product to any investor. The complaint alleges that Patatian did not understand the basic features and risks associated with the non-traded REITs and failed to conduct reasonable diligence to understand the product. Some of Patatian's customers also had liquidity concerns and thus his recommendation to purchase an illiquid non-traded REIT was further unsuitable due to each customer's specific situation and needs. The complaint also alleges that Patatian caused customers to incur taxes and surrender fees by recommended that the customers surrender existing variable annuity policies when he failed to understand the adverse financial consequences of the surrenders. The complaint further alleges that Patatian recommended variable annuity exchanges that were unsuitable because he failed to understand the consequences of those exchanges, including the increased cost of the new variable annuities and the fact that a return of premium death benefit was not a standard feature of all variable annuities. In addition, the complaint alleges that without a customer's knowledge or consent, Patatian impersonated the customer in a telephone call with an insurance company to obtain the contract value and surrender fee for the variable annuity. Moreover, the complaint alleges that Patatian recorded inaccurate customer information on his member firm's customer account and disclosure forms, including by overstating customers' net worth and exaggerating customers' years of investment experience. Notably, the state of the California and the REIT issuers limited the total purchase of a REIT to 10 percent of the customer's net worth. In some instances, Patatian inflated the customer's net worth on the firm's REIT paperwork in order to evade the limits.

Order

Bar (Permanent)

All Capacities

Indefinite

9/28/2023

Disgorgement

$458,418.07

Monetary Penalty other than Fines

$20,665.63

plus prejudgment interest

Hearing Panel decision rendered June 10, 2022, wherein Patatian is barred from association with any FINRA member in all capacities, ordered to pay $262,958.73, plus interest, in restitution to customers, and ordered to pay disgorgement in the amount of $458,418.07, plus interest. Patatian is also ordered to pay costs in the amount of $19,083.33. The sanctions were based on the findings that Patatian made unsuitable recommendations to his customers. The findings stated that Patatian violated his reasonable-basis suitability obligation in connection with the non-traded real estate investment trusts (REITs) he recommended to customers. Patatian did not understand the potential risks of the non-traded REITs he recommended to customers. In addition, Patatian violated his customer-specific suitability obligation to certain customers. Each customer had specific liquidity needs, none wanted an investment that was or could be illiquid, and none wanted a risky investment. Nonetheless, Patatian recommended that the customers invest a substantial percentage of their liquid net worth into a non-traded REIT. The findings also stated that Patatian made unsuitable recommendations to customers that they surrender their variable annuities to purchase non-traded REITs. Patatian did not understand that the surrenders he recommended would cause his customers to incur significant tax liabilities, and he incorrectly advised some of his customer that their surrenders qualified as tax-free 1035 exchanges. In total, Patatian's customers incurred more than $67,000 in taxes and fees as a result of their surrenders. The findings also included that Patatian made unsuitable recommendations to customers that they exchange their variable annuities for new variable annuities. Patatian recommended that his customers exchange their variable annuities based on faulty cost comparisons. As a result, the customers experienced a significant increase in costs and fees. FINRA found that Patatian impersonated a customer on a phone call with an insurance company after he recommended that his customers, a married couple, surrender a variable annuity to purchase a non-traded REIT. As part of his impersonation, Patatian provided the customer's date of birth and the last four digits of the customer's social security number to the insurance company. Patatian claimed that he had signed documentation and express authority from the customers to find out about the surrender charge and contract value from the insurance company, but he provided no signed documentation or evidence of express authority that would have permitted him to impersonate the customer on a phone call with the insurance company. FINRA also found that Patatian caused his member firm to maintain inaccurate books and records. First, Patatian overstated his customers' investment experience on the firm's new account forms. Second, on the client disclosure forms, Patatian inflated his customers' net worth exclusive and liquid net worth, sometimes shortly after recording significantly lower amounts for those categories in the new account forms. Patatian admitted that he overstated his customers' financial information and investment experience in order to circumvent investment limitations and obtain approval for the non-traded REIT purchases. On July 5, 2022, Patatian appealed the decision to the NAC. NAC decision rendered September 28, 2023, wherein the findings made are affirmed and the sanctions imposed by the Hearing Panel are modified. Patatian was barred from association with any FINRA member in all capacities, ordered to pay disgorgement in the amount of $458,418.07 in commissions earned, plus interest, and ordered to pay $20,665.63 in costs. On November 7, 2023, Patatian appealed the decision to the SEC. On February 28, 2024, the SEC issued an order granting request to dismiss application for review. It is ordered that the request of Patatian is granted and that the review proceeding is dismissed.

NEWBRIDGE SECURITIES CORPORATION

Permitted to Resign

REP FAILED TO DISCLOSE ARREST INFORMATION DURING PRE-HIRE PROCESS.

I was NOT arrested. I was detained and cited a ticket (citation) and Released at the scene. This was NOT a reportable event. It was a Misdemeanor. I pleaded Not Guilty. This was a Misdemeanor. On Newbridge Securities Pre-Hire forms, I answered ALL their questions honestly. I learned about this Termination disclosure "THIS WEEK".

Client alleges that he was not informed of the liquidity provisions of his investment.

Client acknowledged the liquidity provisions of the product on multiple documents.

Poor recommendations from 09/01/2016 to 06/12/2017

$9,900.00

Customer claimed he received bad advice.

$30,000.00

Client claims that she did not fully understand her VA investment at the time of purchase through a former CFS representative in December of 2011. Client alleges that she was not properly informed as to investment risk and product details and now has an immediate need for the invested principal requiring full surrender. A CFS review confirmed that all material product features and required disclosures were made both verbally and in writing as evidenced on signed documentation. As of this filing date, CFS continues to review and discuss options for resolution with the client. Accommodation settlement with client for surrender charges incurred in the amount of $492.35 as the result of a partial surrender of VA in January of 2015. Client confirmed satisfaction with reexplanation of VA and working relationship with new advisor at branch and will continue to maintain investment.

$11,300.00

$492.35

Here is another baseless complaint that was likely encouraged and orchestrated by CUSO Financial after my departure. CUSO Financial will certainly and promptly deny this claim because it is indeed groundless and without any merit. The client understood and signed all of the required disclosures and paperwork many years ago. The investment has appreciated in value significantly based upon my investment recommendations and she has ample liquidity built within the investment.

CUSTOMER ALLEGES UNSUITABLE RECOMMENDATIONS RELATED TO SWITCHING FROM ONE PRODUCT TO ANOTHER. UNEXPECTED TAX CONSEQUENCES, AND MISREPRESENTATION OF PRODUCTS. SPECIFICALLY THE CLIENT BELIEVED A VARIABLE ANNUITY PRODUCT HAD PRINCIPAL PROTECTION AND GUARANTEED RETURNS.

$23,000.00

THE FIRM INVESTIGATED THE ALLEGATIONS AND FOUND NO EVIDENCE TO SUPPORT THE CLAIMS.

CUSTOMER ALLEGED THAT MR. PATATIAN ENSURED HIM THAT THE VARIABLE ANNUITY PURCHASED WAS SURRENDER FREE AFTER 5 YEARS AT THE END OF 5 YEARS A 5% ANNUAL RETURN ON THE INVESTED AMOUNT WOULD BE CREDITED TO THE ACCOUNT. FURTHER, WHEN CUSTOMER ASKED ABOUT VARYING ACCOUNT BALANCE ON STATEMENTS FROM THE ANNUITY PROVIDER, MR. PATATIAN TOLD THE CUSTOMER NOT TO WORRY, THAT HIS PRINCIPAL AND %5 RETURN WERE GUARANTEED.

$23,000.00

THE FIRM INVESTIGATED THE ALLEGATIONS AND FOUND NO EVIDENCE TO SUPPORT THE CLAIM. CLIENT WAS UNABLE TO PROVIDE ANY ADDITIONAL INFORMATION TO SUPPORT THEIR CLAIM AND AGREED TO TAKE NO FURTHER ACTION ON THIS MATTER

CUSO FINANCIAL SERVICES, L.P.

Permitted to Resign

FAILURE TO FOLLOW FIRM POLICY WITH REGARDS TO FIRM TRANSACTION DOCUMENTATION.

THE CLIENT PURCHASED A VA THROUGH CFS REPRESENTATIVE PATATIAN IN MAY 2008. AT THE TIME OF PURCHASE THE CLIENT HAD PREVIOUS INVESTMENT EXPERIENCE INCLUDING VARIABLE ANNUITIES, AND SHE INDICATED THAT SHE HAD A GROWTH OBJECTIVE, A MEDIUM RISK TOLERANCE AND A TIME HORIZON OF 5-10 YEARS WITH NO PLANS TO TAKE WITHDRAWALS. THE CLIENT AFFIRMATIVELY ELECTED TO INVEST IN SEPARATE ACCOUNTS RATHER THAN INVEST IN THE 1-YEAR FIXED ACCOUNT UNTIL THE END OF THE 30 DAY RIGHT TO EXAMINE PERIOD. SHE SURRENDERED DURING THE FREE-LOOK PERIOD AND ALLEGED AN $11,715.00 MARKET LOSS. ON OR AROUND JULY 12, 2008, THE CLIENT INDICATED THAT HER SOLE REASON TO EXERCISE THE FREE-LOOK WAS "BECAUSE THE ACCOUNT WENT DOWN" IN VALUE. THE PURCHASE OF THE VA WAS SUITABLE FOR THE CLIENT AND WE DENY ANY WRONGDOING.

$11,715.00

$8,786.30

AS PART OF THE SETTLEMENT AGREEMENT REACHED BY THE CLIENT AND CFS, THE CLIENT AGREED THAT PAYMENT WAS NOT TO BE CONSTRUED TO BE AN ADMISSION OF ANY WRONGDOING OR LIABILITY ON THE PART OF CFS OR ITS AGENTS.

CLIENT ALLEGES THE FINANCIAL CONSULTANT RECOMMENDED INVESTMENTS THAT WERE INCONSISTENT WITH HER NEEDS. THE INVESTMENTS WERE PURCHASED IN SEPTEMBER 2003.

$12,951.92

THE REPRESENTATIVE MET WITH MS. GOLDWASSER ON SEVERAL OCCASIONS BEFORE THE SALE AND AFTER THE TRANSACTION WAS COMPLETED. THE CLIENT HAD PREPARED A DETAILED LIST OF QUESTIONS THAT WERE ADDRESSED/ EXPLAINED BY THE REP. BEFORE, DURING AND AFTER THE FREE LOOK PERIOD. THROUGHOUT THEIR MEETINGS, THE CLIENT EXPRESSED SATISFACTION WITH THE FINANCIAL PLAN AS IT ADDRESSED HER SHORT TERM, INTERMEDIATE AND LONG TERM GOALS. THIS TRANSACTION WAS APPROVED BY WMFS COMPLIANCE. MS. GOLDWASSER IS A SOPHISTICATED INVESTOR THAT HAS A HISTORY OF VARIOUS INVESTMENTS AND KNOWLEDGE OF INVESTMENTS IN GENERAL. **AS A RESULT OF AN INVESTIGATION INTO THE CLIENTS ALLEGATION, IT APPEARS FULL AND FAIR DISCLOSURE WAS PROVIDED.**

CLIENT ALLEGES THAT THE INVESTMENTS WITHIN HIS ACCOUNT WERE CHANGED WITHOUT HIS KNOWLEDGE IN OCTOBER OF 2003.

$10,758.80

AN INVESTIGATION INTO THE ALLEGATION REVEALED THAT THE CLIENT SIGNED SEVERAL DOCUMENTS AUTHORIZING THE CHANGES WITHIN HIS ACCOUNT. REGARDING SAID TRANSACTION, THE TRANSACTION WAS COMMUNICATED TO THE WMFS COMPLIANCE DEPARTMENT AND THE CLIENT PRIOR TO THE TRADE BEING EXECUTED. THE TRANSACTION WAS APPROVED BY THE WMFS COMPLIANCE DEPARTMENT AND THERE IS WRITTEN DOCUMENTATION. THE CLIENT'S ACCUSATION WAS DENIED.

WM FINANCIAL SERVICES, INC.

Discharged

EMPLOYMENT WAS TERMINATED DUE TO INCONSISTENCIES IN STATEMENTS PROVIDED TO REGIONAL SALES MANAGER

THE TRANSACTION THAT LED TO THE TERMINATION WAS APPROVED BY THE WMFS COMPLIANCE DEPARTMENT. THE CLIENT'S NEPHEW WAS PRESENT AT ALL MEETINGS WITH THE CLIENT. THE ACCUSATION WAS MADE BY THE NEPHEW, WHO IS NOT NAMED ON THE ACCOUNT, AND NOT THE ACTUAL CLIENT. THERE WERE NO LOSSES OR DAMAGES THAT RESULTED FROM THIS TRANSACTION.