On February 12, 2020, the Securities and Exchange Commission (SEC) charged Criterion Wealth Management Insurance Services for committing fraud by failing to disclose significant conflicts of interest in recommending investments in real estate investment trusts (REITs) to their clients. According to the complaint, Criterion advisors recommended that their clients invest more than $16 million in four private REITs, without disclosing that the funds managers of these investments had paid them $1 million. This payment was on top of the high fees and commissions the advisors also received for recommending these investments.

According to the SEC press release, Criterion clients have experienced reduced investment returns as a result of this undisclosed fraud. Our firm is investigating potential REIT fraud claims on behalf of those who invested with Criterion Wealth Management. Speak with a lawyer to learn more about your options.

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California's Criterion Fraud Charges: Ausdal Financial's Robert Gravette and Mark MacArthur Named in Complaint

On February 13, 2020, the SEC announced that it had charged Criterion Wealth Management, and its then co-owners Robert Gravette and Mark MacArthor for “breaching their fiduciary duty and defrauding their advisory clients.” The SEC complaint alleges that, from 2014 to 2017, the defendants recommended their clients private REIT investments without disclosing their financial interest and the compensation agreement they had entered into with the fund managers. The SEC further states,

The complaint further alleges the defendants were incentivized to keep their clients invested in the funds, rather than allocate their capital elsewhere, because the additional side compensation was recurring and depended on Criterion’s clients remaining invested.

According to the complaint, investors in two of these funds may have suffered investment losses as a result of Criterion’s fraud. The complaint states,

the undisclosed compensation that defendants received reduced the investment returns that defendants’ advisory clients would otherwise received.

Many stock brokers and financial advisors have failed to disclose the risks associated with private REIT investments to their clients. While REITs are often marketed as low-risk, high yield investments, FINRA and the SEC have recently increased scrutiny into the marketing of these investments. Non-traded REITs are not traded on the public securities exchange, meaning that these REITs can often be illiquid. Many investors have reported being unable to redeem their shares from non-traded REITs and remain stuck in these uncertain investments as a result. According to the SEC Complaint,

Defendants kept their clients in the dark as to all these material facts and, in doing so, they violated their fiduciary duty and defrauded their advisory clients.

If you invested with Criterion Wealth Management, or with Robert Gravette and Mark MacArthor through Ausdal Financial Partners, you may have a legal claim.

Our REIT Lawsuit Investigations

Gibbs Law Group is currently investigating a number of REITs on behalf of shareholders. These REITs include:

If you invested in any of these REITs, or others, we may be able to help. Speak with a lawyer today to learn more about our REIT lawsuits.

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Scott Silver

Scott focuses his law practice on securities arbitration and litigation and plaintiff-side class action litigation, representing individual investors and institutions in claims against brokerage firms, investment advisors, commodities firms, hedge funds and others.

Michael Schrag

Michael has over 20 years of experience representing individual and small business plaintiffs against the world’s large financial institutions, including Visa, Mastercard, and Chase.

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Eileen is involved in the firm’s securities practice and has over a decade of experience in the legal world. She received her law degree from American University in 2005.

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David’s advocacy has generated major recoveries for consumers impacted by financial fraud. He was named to the Top 40 Under 40 by Daily Journal and a “Rising Star in Class Actions” by Law360.

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Amanda is spearheading a securities lawsuit against NantHealth concerning fraudulent statements to investors about the success of its key product.

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Gibbs Law Group

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Silver Law Group

Silver Law Group is a team of securities lawyers, forensic accountants, and support staff who are dedicated to helping investors recover losses through securities arbitration and litigation.

The firm is led by Scott Silver, a former Wall Street defense attorney who has been representing customers in securities and investment fraud cases since 2002. Scott is admitted to practice in New York and Florida and the firm’s FINRA arbitration attorneys represents investors nationwide.