Theodore Forest Etter – and the firm that employs him or her – is regulated by the Financial Industry Regulatory Authority (FINRA).
If you are like most people, before you go out to dinner at a new restaurant, you probably take a quick look at the reviews. This makes sense; you are going to pay for an expensive dinner, and you need to be sure that you are getting a good value.
Yet, when choosing a financial advisor, many people fail to conduct this same level of due diligence. Before turning over access to your money, you need to be sure that you have found a financial advisor that you can trust. Here, our audit report, including details of allegations, complaints, and sanctions will help you decide whether or not to invest with Theodore Forest Etter.
The stock market is a device for transferring money from the impatient to the patient… Warren Buffet
BrokerComplaints.com is currently investigating allegations related to Theodore Forest Etter. We provide a free platform for investors to help them in their claims against negligent brokers and brokerage firms.
About Theodore Etter
Theodore Forest Etter is an Investment Adviser. Theodore Forest Etter’s Central Registration Depository (CRD) number is 737162 and the FINRA Profile can be found at – https://brokercheck.finra.org/individual/summary/737162.
Click here to download a Detailed Audit Report for Theodore Forest Etter.
Theodore Forest Etter has previously been reprimanded and has disclosures and/or client dispute(s) listed at FINRA BrokerCheck.
Accusations and Disclosures
You can find below, a quick snapshot of Theodore Forest Etter’s regulatory actions, arbitrations, and complaints.
DISCLOSURE 1 –
- Event Date: 7/3/2018
- Disclosure Type: Civil
- Disclosure Resolution: Final
- Disclosure Detail :: Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Allegations: Litigation Release No. 24184 / July 3, 2018 – The Securities and Exchange Commission announced charges against two real estate investment funds and four executives in connection with their alleged roles in misleading investors by failing to disclose that it could not pay its distributions and was using money from a newer fund to pay distributions to investors in the older fund. The SEC also charged a fifth executive for allegedly signing false SEC filings. The United Development Funding family of investment funds (UDF) deploys investor capital towards the financing of homebuilders and land developers through private and publicly-traded investment funds. UDF used money from a newer fund to pay distributions to investors in an older fund, without adequately disclosing the use of funds and the nature and status of loans made to developers. UDF solicited investments in a series of investment funds (UDF III, UDF IV) by stating its ability to generate 8% to 9.75% annualized returns, and to pay investors regular distributions from loans for property development. By 2009, UDF III had made substantial loans to developers and was making monthly distributions to investors in amounts that at times exceeded developer interest payments during the same period. In 2011, UDF IV began loaning money to developers of UDF IV projects who had also borrowed money from UDF III. Unbeknownst to investors, however, UDF directed the developers to use the UDF IV money to pay down separate UDF III loans, instead of using the funds loaned from UDF IV to develop UDF IV projects. In most of these cases, the developers never actually received the borrowed funds at all, and UDF simply transferred the money from UDF IV to UDF III. UDF III then used the loan payments-which were comprised of funds from UDF IV-to, in part, make distributions to UDF III investors. Using these transactions, which were not adequately disclosed to investors, UDF was able to cause UDF III to pay its investors at least $67 million of distributions using funds from UDF IV. UDF IV also failed to adequately disclose the nature of multi-phase projects in its loan portfolio. UDF IV told investors that it did not invest its loans in unimproved real property. This gave the impression that all of the loans in UDF IV’s portfolio were funding real estate projects that were under construction. In truth, UDF IV had loaned money for acquisition of unimproved properties designated for multi-phase development. In some cases, the properties remained in the entitlement phase even after they had been in UDF IV’s portfolio for years. In addition, Generally Accepted Accounting Principles (GAAP) required UDF III to report if any of its significant outstanding loans became impaired-meaning UDF III believed it was unlikely to fully collect on the loan. UDF III knew or should have known before it filed its 2013 Form 10-K that it was unlikely to fully collect on an approximately $80 million loan to its second largest borrower. Although UDF III’s financial statements reflected general reserves, UDF III took no specific impairment on the loan and told investors that full collectability was probable. UDF III, UDF IV, and UDF executives including Theodore Etter knew or should have known that they had misled investors about the use of funds and the nature and status of loans made to developers. This misconduct violated Sections 17(a)(2) and (3) of the Securities Act of 1933 and Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, 13a-13, and 13a-14 thereunder.
- Resolution: Judgment Rendered
- Sanction Details :: Sanctions: Civil and Administrative Penalty(ies)/Fine(s) Sanctions: Disgorgement
- Sanction Details :: Amount: $6,809,282.00 Sanctions: Monetary Penalty other than Fines Sanctions: Injunction
- Sanctions: permanently restrained
DISCLOSURE 2 –
- Event Date: 9/6/1988
- Disclosure Type: Regulatory
- Disclosure Resolution: Final
- Disclosure Detail :: DocketNumberFDA: TEX-538
- DocketNumberAAO: 538
- Initiated By: NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.
- Resolution: Decision
- Sanction Details :: Sanctions: Monetary/Fine
- Sanction Details :: Amount: $2,000.00 Sanctions: Censure
- Broker Comment: SEE ATTACHED NASD NOTICE OF DECISION
According to a study prepared for the FINRA Investor Education Foundation, 80 percent of American investors report that they have been solicited to participate in a fraud scheme, while 11 percent of American investors report that they personally lost money as a result of fraud.
FINRA notes that the rate of investment fraud is most likely much higher than it is reported. This is because many victims of financial advisor scams are too ashamed to come forward. Further, the study also found that a significant number of investors do not know how to spot common red flags of investment fraud. The least you should do is share your experience with other potential victims of investment scams.
Previous Associations
Under federal securities law and securities industry regulations, registered investment firms have a legal duty to supervise their financial advisors. Section 15(b)(4)(E) of the Securities and Exchange Act of 1934 makes a securities firm liable for the conduct of representatives.
- IMS SECURITIES, INC. (CRD#: 35567) :: 3/8/2005 – 6/2/2008 :: HOUSTON, TX
- D.H. HILL SECURITIES LLP (CRD#: 41528) :: 2/11/1999 – 12/1/2004 :: KINGWOOD, TX
- SOUTH CENTRAL SECURITIES, INC. (CRD#: 10193) :: 10/27/1981 – 10/22/1987
The duty to supervise securities representatives is a strong legal requirement. Registered investment firms must take many different steps to ensure that they are protecting their customers from irresponsible and criminal financial advisors.
Legit or Not?
Unfortunately, stockbroker fraud is more common than many investors would like to think. And yes, stockbrokers (including Theodore Forest Etter, but not limited to) can (and do) steal money from their clients. While it’s rare that a broker will literally steal his client’s money (though that does happen), typically the “theft” of investment funds comes in the form of other fraudulent violations of securities law and FINRA rules which leads to significant investment losses.
Sometimes investment losses occur because advisors, stockbrokers, and even brokerage firms, commit fraud. Massimo Vignelli
Investors generally understand that there are risks associated with buying and selling securities. The market can go up, and the market can go down. No matter how skilled of an investor you are, there are always risks. With that being said, sometimes investment losses cannot be blamed on simple back luck.
There are 10 major types of complaints we receive against Investment Brokers –
- Outright Theft (Conversion of Funds)
- Unauthorized Trading
- Misrepresentation or Omission of Material Facts
- Excessive Trading (Churning)
- Lack of Diversification
- Unsuitable Investment Recommendations
- Failure to Disclose a Personal Conflict of Interest
- Front Running of Transactions
- Breakpoint Sale Violations
- Negligent Portfolio Management
Do your due diligence before investing. Public records are available for everybody to review and decide on the safest bet.
How to Protect Yourself
We, as citizens, place a great deal of trust in the financial advisors who are tasked with helping us achieve and maintain financial security. Most of the time financial advisors and stockbrokers are honest folks who work diligently in their client’s best interests. However, on occasion financial advisors and the brokerage firms who employ them mess up and cause serious financial harm to their clients. Sometimes these losses are caused by simple negligence. Other times fraud or other serious misconduct is to blame.
Here are 5 signs that your broker needs to be reported –
- Breach of Fiduciary Duty: Under the Investment Advisers Act of 1940, certain investment professionals, known as registered investment advisors (RIAs), owe fiduciary obligations to their customers. Your investment broker must always look out for your best interests. If you lost money because of your broker’s breach of fiduciary duty, you may be entitled to compensation for the full value of your damages.
- Unsuitable Investments: Many financial advisors are not fiduciaries. Instead, they are held to the suitability standard. These stockbrokers and financial advisors can only sell and recommend financial products that are appropriate for a customer’s unique investment profile. If you lost money in unsuitable investments, you should consider reporting them.
- Material Misrepresentations or Omissions: Brokers have a duty to make fair and honest representations to their clients. If they fail to do so, and an investor loses money due to a misrepresentation or a material omission, the broker may be liable for the investor’s losses.
- Lack of Diversification: Brokers must also act with the appropriate level of professional skill. Pushing a customer into over-concentrated investments is highly risky. Brokers can be held liable for losses sustained because of an investor’s inappropriate lack of diversification.
- Excessive Trading (Churning): Stockbrokers and financial advisors must have a well-grounded, reasonable basis to execute all trades. Unfortunately, there are cases in which brokers will frequently trade on a customer’s account, simply to increase their own fees. This unlawful practice is known as churning.
- Unauthorized Trading: Brokers must have the proper legal authority to make transactions on behalf of a client. If you lost money because your broker made trades that you never approved of, you may have been the victim of unauthorized trading. You should consult with an experienced attorney.
Report Theodore Etter
In order to prevail in an investment fraud lawsuit or FINRA arbitration cases, you must be able to assert a viable ‘cause of action’.
Theodore Forest Etter – and the firm that employs this broker – is regulated by the Financial Industry Regulatory Authority (FINRA). FINRA provides an online form to allow investors to file a formal complaint against their financial advisor, stockbroker, or brokerage firm.
Click here to go to FINRA’s Online Complaint Form →
This form will ask you for specific information related to your complaint. Be prepared by gathering the following:
- Name and symbol for the investment product in question.
- The CRD number (737162) for the broker – Theodore Forest Etter
- Your complete contact information.
Remember, it is advised to report your broker to FINRA, only after you have exhausted all of your other remedies and carefully prepared a compelling complaint. Once you file a complaint against your broker at FINRA, your case will be bound by FINRA’s rules and the arbitration panel’s eventual decision. The time clock will start, and your complaint will be served on your broker or broker-dealer.
The views and opinions expressed in these articles are those of the source BrokerComplaints.com and do not necessarily reflect the official position of ‘The Skeptic Files,’ which shall not be held liable for any inaccuracies presented. The information provided within this article is for general informational purposes only. While we try to keep the information up-to-date and correct, there are no representations or warranties, express or implied, about the completeness, accuracy, reliability, suitability or availability of the information in this article for any purpose.
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