Broker Michael B. Barnett Allegedly Invests Client Funds in Speculative Securities

Michael Barnett (CRD #5792242) is a currently registered broker and investment advisor working with J.J.B. Hilliard, W.L. Lyons, LLC of Marion, IL (CRD #453). He has been with Hilliard Lyons since 2012. Previously, Barnett was registered with Edward Jones (CRD #250) of Herrin, IL. He has been in the industry since 2010.

Barnett has three pending customer complaints in 2018, with the damages requested totaling $133,529.56. Two of these claims involve allegations of over-concentration and losses related to a company called Breitburn Energy (BBEP), and that the company was unsuitable for the clients. Both complaints include allegations of breach of contract and fiduciary duty, violation of Kentucky Consumer Protection Act, Kentucky Blue Sky Law, and the Illinois Consumer Fraud Act. The third 2018 complaint, also pending, allege “breach of fiduciary duty, violation of Illinois’ Securities Act (Section 815 ILCS 5/12 et al.), negligence/negligent misrepresentation/omission, breach of contract, restitution, common law fraud, and negligent supervision.”

In 2017, Barnett had two additional customer complaints. In one case, the client alleges “unauthorized trading in an unsuitable security.”  The second complaint alleges “misrepresentation, unsuitable investments, and unauthorized trading in a single security beginning in 2014 through 2015.” The client has requested damages of $1.5 million.

A customer complaint in 2016 led to an award of $441,338.73 in compensatory damages. The clients alleged that Barnett sold all of their blue-chip stocks and invested the money “in a highly speculative oil and gas company known as Breitburn Energy Partners Limited Partnership.” This exposed the clients to a great deal of risk that was contrary to their conservative, low-risk investing style. In addition to the compensatory damages, the clients were also awarded $100,000 in punitive damages, $94,150.00 in attorneys’ fees, and $18,399 in costs and forum fees. (The firm filed a motion to vacate.)

Did You Invest With Michael Barnett?

If you’re wondering if your investments are safe and were properly done, we can take another look at your accounts. Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.