Once upon a time, Berthel Fisher & Co Financial Services was a thriving brokerage firm with hundreds of offices and brokers spread across the United States. Like dozens of other firms, the company aggressively marked tenant-in-common (TIC) interests prior to the economic meltdown. According to the well respected InvestmentNews, half of the firms that once sold TICs have now shuttered their doors.
Once on the verge of going out of business itself, Berthel Fisher appears back from the grave.
We have represented almost one hundred investors who were victims of a TIC fraud perpetrated by Carlton Cabot. Although Cabot is responsible for investors losing tens of millions (perhaps hundreds of millions) of dollars, his TIC fraud was nothing compared to that by DBSI. 22,000 victims and creditors have filed bankruptcy court claims totaling $102 billion.
As jurors deliberate the criminal charges against the principals of DBSI, it appears that one of the primary brokerage firms selling DBSI, Berthel Fisher, has a new lease on life. According to InvestmentNews, the company and DBSI’s bankruptcy trustee settled $31 million in claims filed against Berthel by former customers. The terms of the settlement are undisclosed.
Although some say the company was on a death watch, the settlement with the bankruptcy trustee should help the company moving forward. Records from the Financial Industry Regulatory Authority show no pending claims against the company.
Stockbrokers and other financial professionals are required to perform due diligence on the investments they sell or recommend to clients. Not only must they perform due diligence on the investments, they also must make sure their recommendations are suitable for the client. An elderly client who needs money for living expenses and retirement, for example, should never be sold speculative or illiquid investments.
Many investors don’t realize they can bring claims against the stockbroker or brokerage firm that sold them a bad TIC or other type of investment. We have met many clients who try and sue the promoter instead of the people selling the investment. Unfortunately, once a TIC fraud is uncovered, the promoter often has no money or headed to jail.
If you lost money in a TIC fraud, Real Estate Investment Trust (REIT) fraud or there Ponzi scheme and you purchased your investment through a stockbroker or insurance agent, you may have a claim. Most such cases can be handled on a contingent fee basis and stockbroker cases can usually be handled on an expedited basis through binding arbitration.