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Claims Dismissed Against Broker-Dealers in Arbitration Case

Monday, April, 23, 2012

Three accredited investors have filed claims against Berthel Fisher and Co Financial Services, a broker-dealer in Marion, Iowa have been dismissed by a FINRA arbitration panel as of April 9. The proceedings actually spanned several months and the resolution took some time to achieve.

Why Financial Arbitration Was Initiated


These claims were in relation to the fact that there was a purchase of tenancy in common or TIC interests and those investors filing the claims said that they were valueless. They alleged that these TICs were simply “a massive fraudulent investment scheme managed by” Berthel and Fisher and also Ameriprise Financial Services. The investors requested rescission of their investments, as well a return of the initial money paid.


Real Estate Arbitration hearings started in August with a brief interruption in February and then concluded in March. A broker dealer said that the testimony “included hundreds of exhibits, testimony from industry experts and more than fifteen fact witnesses,” and ultimately, arbitration attorneys dismissed the investor's claims against the firms. Ameriprise Financial did not participate in the hearings because it isn't a member of FINRA and no claims were adjudicated against them.

Reflections on the Arbitration Attorneys' Decision


Rick Murphy, president of Berthel Fisher stated “We don’t believe so. The building is still there; they [the investors] still own it; it’s still fully occupied” when asked about the investor's claim against the TIC interests. He also said that “We believe, and I believe SEC and FINRA believe, that tenant in common securities are securities under the Act [the Securities Act of 1933]. But it is direct ownership of real estate.” He added that the company believed Berthel Fisher complied with requirements for due diligence regarding such securities, both as required by FINRA and under the Act, “and the arbitration panel obviously felt we had done so as well.”