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Jonathan Cummings Involved in a Dispute Regarding Unsuitable REITs & BDCs

Jonathan Cummings (CRD #: 2715296), a registered broker and investment advisor registered with LPL Financial, was the subject of a dispute involving unsuitable  Real Estate Investment Trusts (REITs) and Business Development Corporation (BDC) recommendations, according to his BrokerCheck record, accessed on February 2, 2022. Keep reading for more details regarding the allegations.

Investor Allegations

On October 15, 2021, an investor alleged that Jonathan Cummings engaged in wrongdoing in the sale of alternative investments. The investor is seeking $35,000. 

On June 9, 2020, an investor alleged that Jonathan Cummings recommended unsuitable REITs and BCDs. The investor further alleged that the investments were inappropriate for their investment objectives and suffered losses. The case was settled for $55,000.

What are BDCs?

FINRA defines a Business Development Company (BDC) as a domestic, closed-end investment company that is operated for the purpose of making equity and debt investments in small and developing businesses, as well as financially troubled businesses. BDCs can be speculative investments that involve significant risks. As a result, BDC investments may not be suitable for all investors.

What are REITs?

A real estate investment trust (REIT) is an entity that holds a portfolio of income-producing real estate properties. A REIT could contain anything from office buildings and other commercial units. By putting their money into a REIT, investors can own a share of those properties. REITs can be unsuitable due to their illiquid nature. Many REITs expect investors to keep their money in the investments for an extended period. REITs may also be unsuitable based on their underlying real estate investments.

If you lost money in unsuitable REITs or BDCs, you might have a viable claim against your broker or broker-dealer, and you should not hesitate to contact the securities attorneys of Kurta Law. 

Unsuitable Investment Recommendations Violate FINRA Rule 2111

FINRA Rule 2111 defines suitable investments as securities that fit an investor’s profile. An investor’s profile includes information about their risk tolerance, financial goals, and age. Investors who rely on their brokers for recommendations may be able to recover their losses through FINRA arbitration.

  • Investments can be unsuitable because they are high risk and likely to lose money.
  • Securities may also be unsuitable because they are illiquid, meaning that they are intended to be held for an extended time, and investors may have to pay high fees to cash out.
  • Securities can be quantitatively unsuitable, which means that brokers executed an excessive number of trades.
  • These requirements apply to the overall investment strategy as well as the investments themselves. For instance, an investment strategy might be unsuitable if the securities are over-concentrated in a particular stock or sector.

Background Information

Jonathan Cummings has passed the following exams:

  • Series 66 – Uniform Combined State Law Examination
  • Series 65 – Uniform Investment Adviser Law Examination
  • Series 63 – Uniform Securities Agent State Law Examination
  • SIE – Securities Industry Essentials Examination
  • Series 7 – General Securities Representative Examination
  • Series 6 – Investment Company Products/Variable Contracts Representative Examination

Jonathan Cummings is a registered broker in 17 states. He is also a registered investment adviser in Texas.

Besides LPL Financial, Jonathan Cummings has worked with the following firms:

  • Securities America Advisors (CRD#:110518)
  • Securities America (CRD#:10205)
  • Investacorp Advisory Services (CRD#:109011)
  • Investacorp (CRD#:7684)
  • AXA Advisors  (CRD#:6627)
  • Mony Securities Corporation (CRD#:4386)
  • Prudential Securities Incorporated (CRD#:7471)
  • Foresters Equity Services (CRD#:18464)

Kurta Law Can Help

If you have worked with Jonathan Cummings and have concerns about your investments, don’t hesitate to contact us today at 877-600-0098 or for a free consultation.

For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.