In a recent development, Grove Point Investments, LLC and William Schumann, a registered representative with Cetera Financial Specialists LLC (CRD 1604894), are facing allegations of unsuitability, overconcentration, breach of fiduciary duty, and negligence in relation to the NorthStar Healthcare Income REIT. The Statement of Claim, filed on behalf of nine claimants, alleges that the activity occurred between March 24, 2014, and February 12, 2016. The case, filed on January 5, 2024, is currently pending resolution.
According to the information provided on William Schumann’s FINRA BrokerCheck report, he has been registered with Cetera Financial Specialists LLC as a broker and investment advisor since December 18, 2023. The claimants are seeking damages in excess of $5,000, which is the minimum threshold for FINRA arbitration.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating William Schumann and Grove Point Investments, LLC in relation to these allegations. The firm encourages any clients who have invested in the NorthStar Healthcare Income REIT through Schumann or Grove Point Investments to contact them for a free consultation by calling their toll-free number, 1-888-628-5590.
Understanding the Allegations and FINRA Rules
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The allegations against William Schumann and Grove Point Investments, LLC involve several key issues that are regulated by the Financial Industry Regulatory Authority (FINRA). These include:
- Unsuitability: FINRA Rule 2111 requires brokers to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer, based on the customer’s investment profile.
- Overconcentration: Overconcentration occurs when a broker recommends that a client invest too much of their portfolio in a single investment or asset class, which can increase the risk of significant losses.
- Breach of fiduciary duty: Brokers have a fiduciary duty to act in the best interests of their clients and to provide them with accurate and complete information about their investments.
- Negligence: Negligence occurs when a broker fails to exercise the level of care that a reasonably prudent person would use in similar circumstances.
If the allegations against Schumann and Grove Point Investments are proven, they may be found to have violated one or more of these FINRA rules and could be subject to disciplinary action, including fines, suspensions, or even a permanent ban from the securities industry.
Investment fraud and bad advice from financial advisors are unfortunately common occurrences. According to a Forbes article, some red flags of investment fraud include promises of guaranteed returns, pressure to invest quickly, and a lack of transparency about the investment strategy or risks involved.
The Importance for Investors
This case highlights the importance of understanding the risks associated with complex investments like REITs and the need for investors to work with brokers and financial advisors who prioritize their best interests. When brokers recommend unsuitable investments, overconcentrate portfolios, or fail to provide accurate and complete information, investors can suffer significant financial losses.
Investors who have worked with William Schumann or Grove Point Investments, LLC and have concerns about their investments should consider seeking the advice of an experienced investment fraud attorney. Haselkorn & Thibaut has a proven track record of success in representing investors in FINRA arbitration cases, with an impressive 98% success rate and over 50 years of combined experience.
Red Flags and Recovering Losses
Investors should be aware of several red flags that may indicate financial advisor malpractice, including:
- Recommendations to invest in high-risk or complex products that are not suitable for the investor’s risk tolerance or investment objectives
- Overconcentration of investments in a single product, sector, or asset class
- Failure to provide complete and accurate information about the risks and potential drawbacks of an investment
- Unauthorized trading or excessive trading in a client’s account
If an investor suspects that they have been the victim of financial advisor malpractice, they may be able to recover their losses through FINRA arbitration. This process allows investors to seek compensation for losses caused by the improper conduct of their broker or financial advisor.
Haselkorn & Thibaut offers free consultations to investors who believe they may have a claim against their financial advisor or brokerage firm. The firm operates on a contingency fee basis, meaning that clients pay no fees unless a recovery is obtained. With their extensive experience and a 98% success rate, Haselkorn & Thibaut is well-positioned to help investors navigate the FINRA arbitration process and seek the compensation they deserve.
For more information or to schedule a free consultation, investors can contact Haselkorn & Thibaut by calling their toll-free number, 1-888-628-5590, or by visiting their website.
