Greenwood Village, Colorado Brokerage Firm Tagged With $653,795.79 Arbitration Award
Littleton, Colorado retiree receives large award against Presidential Brokerage, Inc., for grossly inadequate supervisory procedure.
Carl Jensen, a 79 year old retiree from Littleton, Colorado, is a hardy man. After all, he survived botched cancer surgery that put him in a semi-coma for approximately three weeks. Sunny skies unfortunately did not lie ahead. Jensen later learned that he had been victimized by Presidential Brokerage, Inc. (“PBI”), a broker-dealer and registered investment advisor to whom he entrusted his life savings for many years.
In June, 2008, Jensen’s PBI investment advisor, Jason S. McBride, recommended that he invest $475,000 in Washington Park Office Center, LLC Tenant in Common, an old office building in Dayton, Ohio. The markup on this equity investment was 47.59%. McBride, who admitted never reading the complete risk disclosure documents, split a $33,032.91 commission with PBI. The vacancy rate in Dayton, Ohio, in June 2008, was approximately 20.4%. Not surprisingly, this investment went into foreclosure and Jensen lost a significant portion of his retirement savings.
A Denver, Colorado arbitration panel agreed earlier this week with Jensen’s claim that he had been victimized by PBI. Although Jensen’s out-of-pocket losses were only $413,866.57, the panel issued an award of $653,795.79.
PBI’s conduct “shocks the conscience,” says Kalju Nekvasil, Esq., of Goodman & Nekvasil, P.A., the Jensen’s Clearwater, Florida attorney. According to Mr. Nekvasil, the evidence showed that PBI did not conduct any independent due diligence on this investment, that PBI did not have any procedures covering the marketing of this investment, and that the firm allowed McBride to offer this investment to Jensen before it had even been approved by the firm and a selling agreement executed. PBI’s conduct was especially egregious because PBI incurred a monetary fine and its Chief Compliance Officer was suspended in 2005 by FINRA for inadequate compliance procedures.Back to Recent Cases