Arete Wealth Management, LLC (“Arete Wealth”) (CRD# 44856) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself.
At the Law Offices of Robert Wayne Pearce, we have investigated Arete Wealth and its regulatory and customer complaints and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.
Is Arete Wealth Management, LLC in trouble?
Yes, Arete Wealth Management, LLC is facing significant trouble in 2024 and 2025. The firm has encountered major regulatory actions, including a January 17, 2025, SEC lawsuit alleging fraud related to the sale of over $8 million in unapproved shares of Zona Energy Inc. The White Law GroupSEC.gov Additionally, Arete disclosed settlements totaling more than $1.1 million in the first quarter of 2024 regarding investor claims The White Law GroupInvestmentNews, marking a substantial financial impact on the firm.
The most serious development involves SEC charges against the firm, its affiliate Arete Wealth Advisors LLC, Chief Compliance Officer UnBo Chung, and representatives Joey Miller, Jeff Larson, and Randy Larson SEC.gov | SEC Charges Arete Wealth Broker-Dealer and Advisory Firms, Their Chief Compliance Officer, and Several Representatives in Connection With Illegal Securities Offering. The allegations center on “selling away,” which is prohibited by securities laws SEC.gov | SEC Charges Arete Wealth Broker-Dealer and Advisory Firms, Their Chief Compliance Officer, and Several Representatives in Connection With Illegal Securities Offering, where representatives sold unauthorized securities while concealing their activities from the firm.
A BRIEF OVERVIEW OF SOME OF THE COMPLAINTS AND REGULATORY PROBLEMS ARETE WEALTH MANAGEMENT, LLC HAS FACED OVER THE YEARS
Arete Wealth has accumulated numerous regulatory violations and customer complaints throughout its history. In February 2024, the firm faced a $75,000 arbitration loss and previously encountered a $515,000 arbitration claim in 2021 regarding high-risk private placements managed by GPB Capital Holdings Arete Wealth Management: Complaints and Regulatory Actions – The White Law Group.
The firm has been repeatedly sanctioned by FINRA for supervisory failures. FINRA found that Arete Wealth failed to enforce its written supervisory procedures regarding due diligence for private offerings, resulting in a $25,000 fine. Arete Wealth Management: Customer Complaints & Regulatory Actions.
The recent Zona Energy scandal represents the firm’s most serious crisis. After learning about the unauthorized sales, Chung and Arete management allegedly orchestrated misleading settlement agreements signed by more than 100 clients containing false statements and illegal liability disclaimers. SEC.gov | SEC Charges Arete Wealth Broker-Dealer and Advisory Firms, Their Chief Compliance Officer, and Several Representatives in Connection With Illegal Securities Offering. The three representatives involved were terminated in November 2023 for not being forthcoming during internal investigations.
Can I Sue Arete Wealth Management, LLC?
Yes, you can sue Arete Wealth Management, LLC if you have lost money due to fraud, negligence, breach of fiduciary duty, or other broker misconduct by the firm or its employees. Most investors, however, unknowingly waive their right to file a lawsuit in court and instead are required to pursue claims through a FINRA arbitration proceeding.
Attorney Robert Wayne Pearce has more than 45 years of proven experience representing investors in FINRA arbitration cases involving investment fraud, unsuitable recommendations, and other forms of financial advisor misconduct. He knows how to not only sue Arete Wealth Management in arbitration but also how to build a strong case to help investors recover their losses.
What is Arete Wealth Management, LLC?
Arete Wealth (CRD# 44856) has been registered with the SEC and FINRA as a broker-dealer since 1998. The company is controlled by Arete Wealth, Inc., and its principals and is headquartered in Chicago, Illinois, with small branch offices located throughout the United States. Its independent broker-dealer business model has grown through acquisition and organic development of primarily one- and two-person registered representative offices supervised remotely. Today, there are over 100 Arete Wealth branch offices with over 265 registered representatives in every state. It is now one of the 50 largest independent broker-dealer and investment advisory firms in the United States.
A BRIEF OVERVIEW OF THE COMPLAINTS AND REGULATORY PROBLEMS ARETE WEALTH MANAGEMENT, LLC HAS FACED OVER THE YEARS
Arete Wealth has been censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors.* For example, FINRA investigated the broker-dealer and found that Arete Wealth failed to enforce its written supervisory procedures regarding due diligence for private offerings. Specifically, Arete Wealth failed to document its due diligence efforts for three offerings and, for one of these offerings, failed to perform adequate due diligence.According to FINRA, this conduct violates NASD Conduct Rule 3010 and FINRA Rule 2010, and it censured and fined the firm $25,000.
Examples of Regulatory Problems and Complaints for Arete Wealth Management, LLC
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise-type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with an on-site manager, compliance officer, and operational personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and, therefore, are not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance, and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these independent broker-dealers.
Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence, and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative, earning a commission. There may be no one on-site to detect forgeries of clients’ signatures on documents or the placement of inaccurate information about a client’s investment objectives and financial condition, to document the suitability of a particular investment recommendation. Oftentimes, there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.
These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.
How to File an Official Complaint Against Arete Wealth Management, LLC or One of Its Brokers with FINRA?
File an official complaint against Arete Wealth Management, LLC or its brokers with FINRA by using FINRA’s Investor Complaint Center. Complaints may involve fraud, negligence, or breach of fiduciary duty. The Law Offices of Robert Wayne Pearce has over 45 years of experience helping investors file FINRA arbitration claims and recover losses caused by Arete Wealth misconduct.
These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Arete Wealth without representation with an attorney about their complaints and have their complaints denied.
Related Read: Can You Sue Your Brokerage Firm?
Investment Losses? We Can Help
Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.
or, give us a ring at (800) 732-2889.
Consult With An Attorney Who Recovers Investment Losses Caused By Arete Wealth Management, LLC Today!
The securities attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 45 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Arete Wealth Management cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.
Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.
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