Securities Arbitration Lawyers BlogVSR Financial Services Broker Dennis Van Patter Under Investigation for Oil and Gas Securities Recommendations
Silver Law Group is investigating VSR Financial Services (“VSR”) broker Dennis Van Patter (“Patter”) (CRD# 1364583) for allegations that he unsuitably recommended oil and gas investments to his customers.
According to Patter’s Financial Industry Regulatory Authority (“FINRA”) BrokerCheck report, Patter has nine misconduct disclosures on his record. Five of the complaints have settled, and one is a FINRA sanction that suspended Patter for 45 days.
According to the report, FINRA sanctioned Patter after the broker recommended that a retired customer invest in alternative investments unsuitable in light of the customer’s investment objectives and risk tolerance and heavily concentrated the customer’s assets in said investments. Overall, Patter invested $1.6 million of the customer’s money in various alternative investments, all of which were described as highly speculative or very risky, including notoriously volatile oil and gas drilling partnerships, non-traded real estate investment trusts (“REITs”) and private placements.
As a result of Patter’s actions, this retired customer lost 52 percent of his liquid net worth. FINRA punished Patter by suspending him for 45 days and ordering him to pay a fine of $10,000.
In addition to that misconduct, five of the eight customer complaints against Patter have settled for a total of $331,000. All of the customer complaints, including one that was filed in January 2016 and is currently pending, allege misrepresentation, breach of fiduciary duty, and negligence.
Oil and gas securities were at their peak when the commodity was soaring at unprecedented levels in 2008. The prices rallied to a high of just over $110 per unit in 2011, but the commodity was high risk. Another drop occurred in late 2014 and the commodity has currently been valued around $50 per barrel but went as low as the high 20s in early 2016.
Among other basic tenets, brokers are required to recommend suitable investments to their customers. This requires that the broker 1) investigates and conducts due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors to form a reasonable basis for the recommendation of the product; and 2) appropriately matches the investment with the customer’s specific investment needs and objectives, such as the customer’s retirement status, long or short-term goals, age, disability, income needs, or any other relevant factor.
Unfortunately, Patters was not the only broker concentrating customers’ assets in the oil and gas industry. He wasn’t even the only one at the VSR Financial Texas branches.
Silver Law Group has represented and currently represents many clients in these types of oil and gas products and can help you recover some of your losses.
If you lost money investing in oil and gas private placements, publicly-traded drilling partnerships, partnership bonds, or other oil and gas securities 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 ssilver@silverlaw.com or toll free at (800) 975-4345 to find out how we may be able to help you recover some of your investment losses.