Did you lose money investing with Charles Kulch (CRD# 2371584)?
Galvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing with Charles Kulch. If you suffered losses investing with Charles Kulch, then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim.
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
As of July 22, 2020, Charles Kulch’s FINRA BrokerCheck Report contains the following:
Disclosure Events
6 Customer Dispute(s)
5 Regulatory Event(s)
UPDATE 7/22/2020: The Massachusetts Securities Division has charged former NEXT Financial Group representative Charles Kulch for over-concentrating his customers in illiquid investment products including non-traded real estate investment trusts and variable annuities. According to the administrative complaint, Charles Kulch is accused of using dishonest sales practices to sell non-traded REITs and other alternative investments to customers for whom they were unsuitable and in violation of his own employer’s stated policies. “While NEXT put policies in place to protect investors from schemes like Kulch’s, Kulch took steps to manipulate the calculation of key figures NEXT monitored, circumventing such policies and rendering them meaningless,” the complaint states. The complaint further alleges that Charles Kulch wrongly calculated the percentage of customers’ liquid net worth, while also failing to account for the reduction in liquid net worth for each transaction. Charles Kulch purportedly generated nearly one million dollars in commissions over a five-year period. In the same five-year period, Charles Kulch sold non-traded REITs to more than 100 Massachusetts investors, including nearly 50 transactions which violated NEXT Financial’s own policies pertaining to over-concentration and prohibiting the sale of non-traded REITs to customers over the age of 80, according to the complaint. “By disregarding or circumventing established concentration limits, Kulch generated hundreds of thousands of dollars in commissions at the expense of Massachusetts investors,” the complaint added. Last December, the Massachusetts Securities Division fined NEXT Financial $150,000 over unsuitable sales of non-traded REIT sales and its alleged failure to supervise the agent who sold the investments. The agent was not named. In January 2020, the New Hampshire Bureau of Securities fined NEXT Financial $235,000 for similar conduct after the state regulators initiated a formal investigation after receiving a complaint about Charles Kulch. The Massachusetts Securities Division is seeking an order requiring Charles Kulch to provide restitution to compensate investors, as well as an administrative fine and an order to have Charles Kulch permanently barred from acting as a registered investment adviser.
Current and Previous Registrations
10/19/2006 – 06/24/2020 NEXT FINANCIAL GROUP, INC. (CRD#:46214) NASHUA, NH
02/27/1996 – 10/24/2006 INVESTORS CAPITAL CORP. (CRD#:30613) NASHUA, NH
11/03/1993 – 12/11/1995 INVESTORS CAPITAL CORP. (CRD#:30613)
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
Due Diligence Requirement
FINRA requires broker’s to conduct due diligence on investments and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. FINRA Rule 2111(a) states that “a member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.”
Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability. Brokers and the brokerage firms they work for that fail to conduct adequate due diligence on investments they recommend or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
Request a Free Consultation with a Securities Attorney
If you suffered losses investing with Charles Kulch and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
This information is all publicly available and is being provided to you by Galvin Legal, PLLC.
Galvin Legal, PLLC is a national securities arbitration, securities mediation, securities litigation, securities fraud, securities regulation and compliance, and investor protection law practice. For more information on Galvin Legal, PLLC and its representation of investors, please visit www.galvinlegal.com or call 1-800-405-5117.
