North Florida-based D.H. Hill Broker Charles Stevens and St. Johns Financial Planning Under Investigation
Posted: October 11th, 2017
Silver Law Group is investigating St. Augustine Florida-based D.H. Hill Securities, LLLP (CRD# 41528) broker Charles T. Stevens (CRD# 1698058) after FINRA sanctioned D.H. Hill Securities over misconduct concerning public non-traded REITs.
Charles Stevens and St. Johns Financial Planning
Stevens’ runs his own St. Augustine, Florida-based D.H. Hill Securities office under the moniker St. Johns Financial Planning. St. Johns Financial Planning and Stevens hold themselves out as an independent agency specializing in retirement and estate markets that has been in business in the St. Augustine, Florida area for the past twenty-five (25) years, according to Stevens’ and his firm’s website.
According to its website, St. Johns Financial Planning offers securities through D.H. Hill Securities and advisory and money management services through its registered investment advisor, D.H. Hill Advisors, Inc. (CRD# 116324/ SEC# 801-72268). D.H. Hill Advisors is an affiliate of D.H. Hill Securities.
Stevens currently has one customer complaint pending. The customer complaint alleges unsuitable recommendations, breach of fiduciary duty, negligence and breach of contract beginning in early 2009.
Hartman Income REIT Management and D.H. Hill Securities
D.H. Hill Securities has underwritten several non-traded REITs. In fact, upon information and belief, FINRA recently sanctioned D.H. Hill Securities in connection with a non-traded REIT.
Upon information and belief, D.H. Hill Securities underwrote a non-traded REIT for Houston, Texas-based Hartman Income REIT Management, Inc. that is the subject of the FINRA sanctions from November 2016. The Hartman REIT offering during the noted time period in the FINRA sanctions was the Hartman Short Term Income Properties XX, Inc. REIT, also known as the Hartman XX REIT.
The Hartman XX REIT is a public non-traded REIT that has been closed to new investors. According to the offering documents for Hartman XX REIT, D.H. Hill Securities served as underwriter.
D.H. Hill Securities also served as underwriter for Hartman’s most recent REIT offering, the Hartman vREIT XXI, according to the REIT’s prospectus.
What is a Public Non-traded REIT?
Public non-traded REITs have typically been advertised and peddled as sound retirement vehicles due to the high dividend payout, but the product has notoriously been flawed. In recent years, both the SEC and FINRA have issued warnings and guidance on public non-traded REITs, noting the high fees (front-end fees can be as much 15 % of the per share price), distributions that come from the principal, lack of share transparency, and the extraordinary lack of liquidity.
Additionally, many public non-traded REITs often start out as “blind pools,” which means that the REIT takes in investor monies before disclosing exactly how those monies will be invested and simply states what types of properties the REIT plans to buy, rather than disclosing the exact properties that will be owned. Lastly, an external manager usually makes investments on behalf of the public non-traded REIT, creating potential for conflicts of interest.
Public nontraded REITs are often times wholly unsuitable for many investors but brokers and brokerage firms kept recommending them because of the high commissions on the products and low federal interest rates.
Often times, non-traded REITs have a liquidity event goal stated in the prospectus. This is often times an optimistic goal. Sometimes, these liquidity events don’t happen or happen a lot farther down the road, leaving many investors’ money tied up in the non-traded REIT. This can be a looming problem despite everything seemingly going well with the non-traded REIT.
Contact the Silver Law Group if You’ve Lost Money
If you invested in with St. Augustine, Florida-based Charles T. Stevens, St. Johns Financial Planning, D.H. Hill Securities, and/or any Hartman REITs, you may be entitled to recover some of your investment losses. Please contact Scott Silver of the Silver Law Group for a free consultation at firstname.lastname@example.org or toll free at (800) 975-4345 to speak to an attorney to find out how we may be able to help you recover some of your investment losses. Consultation is free, and you pay nothing unless we recover.
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