The Dow Jones news service reported that National Planning Corporation, an affiliate of Jackson National Life Insurance Company, was ordered to pay $6.2 million to a couple who accused their former National Planning representative, Christopher Olson, of misrepresenting investments. Olson was not ordered to pay as he previously filed bankruptcy. The award was made by an arbitration panel of the Financial Industry Regulatory Authority (FINRA).
Awards of this size are relatively unusual. Frequently when they occur, the brokerage firms that are ordered to pay the award simply shut their doors. One of Wall Street’s dirty little secrets is the tiny amount of capital required to become a stockbroker. Some firms and individual stockbrokers purchase errors and omissions insurance but many run “bare.”
National Planning Corporation is a relatively small brokerage firm but its affiliation with Jackson National Life should help. In 2009, NPC was ordered to pay 21 investors $3.7 million after the Massachusetts Securities Division accused the firm of failing to supervise one of their brokers who improperly sold promissory notes to 21 investors. It appears that award was paid and the firm remained open.
NPC’s website claims that Jackson has $130 billion in assets. The connection between the two firms is not clear, however.
According to FINRA documents, Ronnie and Stacy Erickson invested in certain real estate investments products upon the recommendation of Olson. The award does not specify the products, however, we frequently see complaints involving thinly traded REITs (Real Estate Investment Trusts) and TICs (Tenant-in-Common) projects. The Ericksons claim they lost $12.6 million and said that Olson and his employer, National Planning Corporation were liable. According to their complaint, they claimed misrepresentation, breach of fiduciary duty and negligence against Olson. They also claimed that NPC failed to properly supervise Olson.
After a hearing, a three arbitrator panel ruled in favor of the Ericksons and awarded them $6.2 million. The decision was split meaning not all the panel members agreed. Split decisions are also relatively rare in FINRA proceedings but show the system is fair. 2 of the panel members were “public” members while the third was an industry member. The panel split on industry lines.
Probably the most important piece of the story is liability under FINRA’s Supervision Rules. Brokerage firms are required to closely monitor the activities of their employees and insure they are making appropriate recommendations and not breaking any securities laws. Included in those rules is a provision that says, “Each member shall establish procedures for the review and endorsement by a registered principal in writing, on an internal record, of all transactions and for the review by a registered principal of incoming and outgoing written and electronic correspondence of its registered representatives with the public relating to the investment banking or securities business of such member.”
FINRA’s BrokerCheck system reveals that Olson was “Permitted to Resign” NPC amid allegations that he failed to disclose outside business activities and client involvement in those activities.
Olson is currently employed by Berthel, Fisher & Company. There are no allegations that he committed any wrongdoing there. (We note that there are two other Chris R. Olson’s in the securities industry. You can always check BrokerCheck to see what complaints have been made against your broker.)
Stockbrokers are required to report all outside business activities, although sometimes the dishonest ones do not. According to the latest data available from the SEC and FINRA, Olson lists affiliations with Waterway Holding Group, LLC (Minnesota), Land Holding Company, 6 Point Advisors (MN) and Chris Olson Insurance (MN). It is unknown if any of the investments sold to the Ericksons involved these entities.
We hope that National Planning Corporation has the assets or insurance to pay the claims against them. Because of their affiliation with Jackson Life, we believe they do. If you have lost money because of an unsuitable investment sold by Chris Olson, others at NPC or through the actions of any broker selling unsuitable investments, give us a call. We are especially interested in locating clients who purchased investments through Carlton Cabot, Tracy Sunderlage, Nikolai Battoo, PIWM, Maven and Fidelity Insurance.
For more information, contact the author of this post, attorney Brian Mahany at or by telephone at (direct). All inquiries answered within 24 hours and are protected by the attorney – client privilege. Cases accepted in many jurisdictions.
Want more information? Our Due Diligence blog is text searchable and has 0ver 2000 posts! Need information on Nikolai Battoo or PIWM? We have over twenty!
Tagged: investment fraud, Christopher Olson fraud, National Planning Corporation, unsuitable investments