There is lots to say about David Lerner Associates, a Syosset, New York brokerage firm with offices in the Northeast and Florida. In our humble opinion, the firm has a terrible track record with customers. [To learn more about the firm, visit our David Lerner post at the link above.]
Until recently, the company made much of its money hawking illiquid investments called non-traded REITs. Like the old Eagles tune, Hotel California, in a nontraded REIT, you can “check in anytime you want but you can never leave.” Many REIT investors never learned they could not easily sell their shares when they wanted to sell. They only learned when they tried to sell their shares and learned there was no ready market.
The Financial Industry Regulatory Authority (FINRA) and some states cracked down on REITs. A few years ago David Lerner Associates left that business.
Unfortunately, in our humble opinion the company didn’t clean up their act. They just found different junk to sell.
Enter Michael Norton. A broker for many years, Norton worked at three brokerage firms during his time as a stockbroker. Two of those firms, Meyers Pollock Robbins and Marlowe & Company were expelled from the securities industry by regulators.
We can give Norton a pass because he didn’t stay at either place long. Ultimately Michael Norton wound up at David Lerner Associates.
We know many brokers that have a lengthy career and not one reportable event or “disclosure” on their record. Such an event could be a regulatory sanction, criminal conviction or customer claim. Mr. Norton has 7 putting him in the bottom 1 percent of brokers if measured by currently licensed brokers and reportable events.
Where there is smoke, there is fire. Here, the smoke rivals that of last years wildfires in California.
Active Investigation – Michael Norton and David Lerner Associates
We are actively investigating Michael Norton. An investor tells us that Norton recommended an investment in a proprietary energy fund project.
The investment was supposed to be as safe as cash. Not true, the customer says his account went down by over 2/3rds.
If that isn’t enough, Norton never told him there was a sales load or commission of over 6%. And if that still isn’t bad enough to lose most of your life savings, losing your nest egg and paying the broker a huge commission for assisting you in losing your money is icing on the cake.
What was he told to invest in? An energy fund.
SOAEX is short for the Spirit of America Energy A fund. When it was launched in July 2014, it sold for $30 a share or unit. Now it is worth 75% less. And it still carries a front load of 5.75%.
The huge commissions are why brokers like it. And David Lerner brokers sell lots of it.
But is SOAEX (or any energy fund) suitable for seniors and those who want preservation of their principal? Heck NO! With 80% of its money invested in energy stocks, SOAEX is extremely volatile.
Google the phrase “SOAEX class action lawsuit” and you will see a number of law firms were sniffing around the fund. We are sniffing around Michael Norton and other brokers at David Lerner who sold these shares.
In 2018, one person who claimed to be a former David Lerner broker said in a forum,
“I’m a former “Investment Counselor” at David Lerner Associates. I can’t belive the company is able to get away with, and still remain in business. They only train new staff to sell one product, and that is the horrible SOAEX Energy fund. This fund has cost DLA’s clients untold amounts of money, but David and management call it a “cash cow”. They only allow new hires to sell Spirit of America products, and if you don’t, management will bully you until you do, or they fire you. David and his team are a bunch of crooks and scam artists! Save your money and invest anywhere but here!!!”
Is Michael Norton still peddling these fund shares? Did you buy shares in SOAEX from any David Lerner representative? We bet many did and we bet that many of the people who were told to invest in these shares were elderly or retirees with no comprehension of the risks or volatility associated with this investment.
Norton has been at David Lerner for over 20 years. Despite 7 reportable events, they keep him on. We suspect that means he is a great salesman and has sold one heck of lot of whatever the firm is currently pushing.
FINRA has created a new high risk broker plan. These rules are in place are in place to heavily monitor the activities of brokers with checkered histories. Getting placed on the “high risk” list is heavily dependent on the number of disclosures one has. Unfortunately, FINRA doesn’t publish its list of problem brokers nor does it release its formula for placing brokers on that list.
We suspect that Norton is on that list or dangerously close to being added.
Going door to door to peddle investments? Misleading customers about risks? Omitting to disclose the huge front load? Peddling junk? Recommending a volatile product to low income retirees? We think the problems with SOAEX and Michael Norton go deep. And we suspect many other brokers are involved.
*In fairness to Norton, despite numerous complaints including the one we are investigating, his licenses remain in good standing and he has never been subject to any official discipline or regulatory action.
Mahany Law Can Help You Get Your Hard Earned Money Back
Did you lose money through an investment at David Lerner Associates? You may be entitled to get back your money. Mahany Law is a national boutique law firm that sues brokerage firms, banks and lenders. In the case of stockbroker fraud and brokerage claims, we can usually arbitrate those and on average get through a hearing within 14 months or less.
Cases are handled on a contingent fee basis meaning you don’t pay us unless we first collect money on your behalf. Ready to learn more? Contact us online by email at or by phone at 202-800-9791.
Cases are accepted nationwide.
*Do you work for David Lerner? We are always interested in speaking with present and former brokers. You know where the bodies are buried. By sharing your information, we can better help investors and regulators and restore honor to the profession.