Berthel, Fisher & Company Financial Services, Inc. (“Berthel Fisher”) (CRD# 13609) (“Berthel Fisher”) has faced regulatory actions, arbitration matters, and investor complaints involving alleged supervisory failures, unsuitable recommendations, excessive trading, alternative investments, and other securities-related misconduct.
The Law Offices of Robert Wayne Pearce, P.A. represents investors in claims involving fraud, negligence, breach of fiduciary duty, unsuitable investments, and supervisory failures. If you suffered losses involving Berthel Fisher or one of its financial professionals, an experienced investment fraud lawyer can evaluate your potential recovery options.
Can I Sue Berthel, Fisher & Company Financial Services, Inc.?
Yes, you can sue Berthel Fisher if their misconduct or their employees’ wrongful actions caused your investment losses, but you will most likely pursue your claim through FINRA arbitration rather than traditional court litigation. When you opened your brokerage account, you almost certainly signed an arbitration agreement requiring disputes to be resolved through FINRA’s arbitration process rather than in court. This is standard practice across the securities industry.
FINRA arbitration is binding and enforceable, giving you the same opportunity to recover losses as a court lawsuit would. Attorney Robert Wayne Pearce has extensive personal experience in FINRA arbitration proceedings and understands how to not only file claims against Berthel Fisher, but win those arbitrations. The documented regulatory violations and supervisory failures at Berthel Fisher provide strong evidence to support investor claims.
The easiest way to determine if you have a viable case against Berthel Fisher is to discuss your situation with an experienced securities attorney who can evaluate the specific facts of your losses.
How to Sue Berthel, Fisher & Company Financial Services, Inc. for Investment Losses
What Can I Do If I Lost Money at Berthel Fisher?
If you lost money at Berthel Fisher due to advisor misconduct, unsuitable recommendations, or supervisory failures, you can file a FINRA arbitration claim to recover those losses. FINRA arbitration is the standard forum for resolving securities disputes between investors and broker-dealers. The process begins with filing a Statement of Claim that details your losses, the misconduct that caused them, and the legal violations involved.
Your claim will reference the specific problems documented at Berthel Fisher that align with your experience. For example, if your advisor recommended excessive short-term trading of UITs or mutual funds, this connects directly to FINRA’s findings that Berthel Fisher failed to supervise such trading patterns. If unsuitable alternative investments like non-traded REITs or non-traditional ETFs were recommended without proper suitability analysis, this mirrors FINRA’s determination that Berthel Fisher lacked adequate supervisory systems for these products.
The arbitration process typically involves document exchange, hearings before a panel of arbitrators, and ultimately a binding decision. Unlike court litigation, FINRA arbitration follows streamlined procedures designed specifically for securities disputes. Most cases resolve through settlement before reaching a final hearing, as firms often prefer to avoid the publicity and expense of a full arbitration proceeding.
Time limits are critical in securities cases. FINRA’s eligibility rule generally requires claims to be filed within six years of the incident giving rise to the claim. However, state law limitations periods may be shorter, making prompt action essential to preserve your rights.
Who Can Help Me Sue Berthel Fisher?
An experienced securities arbitration attorney can evaluate whether Berthel Fisher’s documented regulatory violations connect to the losses in your specific account. The firm’s repeated FINRA sanctions for inadequate supervision create legal theories of liability that extend beyond just your individual advisor’s conduct. When a broker-dealer fails to implement reasonable supervisory systems, it becomes liable for the resulting investor harm regardless of whether it directly participated in the misconduct.
Your attorney will gather account statements, trade confirmations, correspondence, and other evidence showing how Berthel Fisher’s supervisory failures enabled your losses. This evidence, combined with FINRA’s public findings about the firm’s inadequate systems, builds a compelling case that connects your individual experience to the broader pattern of misconduct at Berthel Fisher.
What is Berthel, Fisher & Company Financial Services, Inc.?
In 1983, Berthel Fisher (CRD# 13609), is a broker-dealer headquartered in Cedar Rapids, Iowa. The firm has operated through a network of financial professionals and branch offices across the United States.
Investors who believe they suffered losses because of unsuitable recommendations, excessive trading, alternative investments, misrepresentations, or supervisory failures can have their accounts reviewed for potential securities claims.
Why Does Berthel Fisher Have So Many Bad Reviews and Customer Complaints?
Berthel Fisher’s business structure creates inherent risks for investors because the company operates as an independent broker-dealer franchise. Unlike traditional brokerage firms with full-service branches and on-site managers, Berthel Fisher’s representatives work in small, remotely supervised offices scattered across the country. This franchise model prioritizes growth and cost savings over investor protection.
The registered representatives at Berthel Fisher run their own separate businesses rather than working as employees. They control their own operations and costs, which means investor protection often becomes a lower priority than generating revenue. These representatives typically operate out of one or two-person offices with no daily on-site supervision.
Supervision falls to other independent contractors who manage Offices of Supervisory Jurisdiction (OSJs) from distant locations. These OSJ managers run their own businesses while supposedly monitoring dozens of far-away branch offices. They cannot provide meaningful day-to-day oversight of what happens in those offices.
This means critical investor protections are missing. New accounts, securities transactions, and client correspondence often receive no immediate review. Warning signs of fraud or unsuitable recommendations can go undetected for months. Some offices receive only one compliance audit per year, leaving investors vulnerable to misconduct during the other 364 days.
The North American Securities Administrators Association (NASAA) has documented that independent broker-dealers like Berthel Fisher generate more instances of sales abuse and investor losses than traditional firms with proper on-site supervision. The remote supervision model simply cannot prevent the types of violations that FINRA has repeatedly cited at Berthel Fisher.
Berthel, Fisher & Company Financial Services, Inc. Has Many Different Regulatory Problems
Berthel Fisher’s rapid growth has not been without consequences. There have been approximately 25 Federal, state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA)) for a violation(s) of investment-related rules or regulations. In addition, there have been hundreds of customer complaints filed against Berthel Fisher for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
We have reported and written about these regulatory problems and customer complaints over many years. Berthel Fisher is a repeat offender: there are over 9 FINRA reported disciplinary proceedings citing the firm with one form of supervisory lapses or another in the last decade.
A BRIEF OVERVIEW OF SOME OF THE REGULATORY PROBLEMS BERTHEL FISHER & COMPANY FINANCIAL SERVICES, INC. HAS FACED OVER THE YEARS*
Berthel Fisher has been repeatedly censured, warned, and fined millions for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:
FINRA Sanctions Berthel Fisher For UIT And Mutual Fund Sales Abuses
FINRA investigated and discovered that Jeffrey Dragon, a registered representative of Berthel Fisher generated approximately $417,000 in concessions for himself and his firm, at the expense of his customers, by recommending and executing a pattern of unsuitable short-term trading of unit investment trusts (“UITs”). This was just the tip of the iceberg because as FINRA investigated further discovered that over 2700 customers failed to receive the UIT sales discounts to which they were entitled.
Dragon’s customers, many of whom were seniors, unsophisticated investors, or both, were advised to liquidate UIT positions that they had held for only a few months, and which they had purchased on Dragon’s recommendations, and then use the proceeds to purchase other UITs. Because each UIT purchased carried a new sales load, and because UITs are designed not to be actively traded, Dragon’s recommendations were excessive and unsuitable.
Dragon’s recommendations to these customers were further unsuitable, in that he designed his recommendations to prevent his customers’ UIT purchases from qualifying for sales charge discounts. Despite regularly recommending that customers purchase UITs in amounts that exceeded volume-discount “breakpoints” of $50,000 and $100,000, Dragon routinely structured their investments – by spreading the amounts over smaller purchases and multiple days – in order to avoid reaching those thresholds. By doing so, Dragon sought to increase his concessions at his customers’ expense.
It was obvious to FINRA that Berthel Fisher allowed this activity to occur – and, in fact, profited from its inadequate system for supervising UIT trading. During the relevant period, Berthel Fisher’s only regular supervisory review of UIT recommendations and customer activity consisted of manual reviews of daily trade blotters that did not indicate either how long UIT positions had been held before liquidation or the source of funds used to purchase new UITs. Thus, Berthel Fisher’s supervisory system was not reasonably designed to prevent short-term and potentially excessive UIT trading.
FINRA concluded that Berthel Fisher’s supervisory system was also inadequate because it was not reasonably designed to prevent short-term and potentially excessive trading in mutual funds. As with UITs, the firm’s supervisory system lacked any methods, reports, or other tools to identify mutual-fund switching or trading patterns indicative of other misconduct.
FINRA also concluded that Berthel Fisher’s supervisory system was not reasonably designed to ensure that the firm’s UIT and mutual-fund customers received all sales-charge discounts to which they were entitled during the UIT Period and Mutual Fund Period, respectively. Instead, Berthel Fisher relied on its registered representatives and its clearing firm to determine whether UIT and mutual-fund purchases should receive sales-charge discounts, and conducted no review or supervision to determine if those discounts were applied correctly.
FINRA found that Berthel Fisher’s supervisory lapses not only allowed Dragon’s breakpoint-manipulation scheme to go unchecked, but it also resulted in further injury to Berthel Fisher’s customers; Berthel Fisher failed to detect that more than 2,700 of its customers’ UIT purchases did not receive applicable sales-charge discounts. As a result, Berthel Fisher customers paid excessive sales charges of approximately $667,000, nearly all of which was paid to Berthel Fisher and its registered representatives as dealer concessions.
Notwithstanding the widespread evidence of sales abuse, FINRA only slapped Berthel Fisher on the wrist with a censure, fine of $225,000, restitution order in the total amount of $117,315.41, plus interest, ordered Berthel Fisher to pay disgorgement in the total amount of $299,471.73, and ordered to retain an Independent Consultant to rewrite it supervisory procedures.
FINRA Sanctions Berthel Fisher For Not Supervising Alternative Investments
FINRA investigated and found Berthel Fisher had an inadequate supervisory system and written procedures, including those concerning its suitability review of transactions in nontraded Real Estate Investment Trusts (“REITs”), non-traditional exchange-traded funds (“ETFs”) and other alternative investments. Further, Berthel Fisher’s supervisory systems and procedures failed to prevent a number of unsuitable sales of alternative investments. In addition, FINRA found that Berthel Fisher did not conduct adequate supervisory oversight of a remote branch office and failed to retain certain electronic communications as required.
In its investigation, FINRA discovered that Berthel Fisher failed to implement an adequate supervisory system, including adequate written procedures, for the sale of alternative investments that was reasonably designed to achieve compliance with NASD Rule 2310, FINRA Rule 2111 and state and prospectus suitability standards. Specifically, the method used by the Berthel Fisher to calculate concentration limits and enforce its own aggregate alternative investment suitability standard did not accurately record all of the alternative investments, including managed futures, oil and gas programs, equipment leasing, business development companies (“BDCs”) and non-traded REITs, in a customer’s portfolio; the Firm did not train its supervisory staff to appropriately analyze state suitability standards as part of its suitability review of certain alternative investments; the paperwork used by the reviewing principal to assess state suitability standards did not consistently contain the appropriate state’s suitability standards; and the Firm had inadequate controls to ensure that its staff, in effecting an alternative investment transaction, used current and accurate subscription agreements as part of the alternative investment purchase paperwork. Berthel Fisher therefore violated NASD Rule 3010(a) and (b), NASD Rule 2110 and FINRA Rule 2010.2
Further, FINRA discovered that Berthel Fisher did not implement adequate supervisory systems and procedures in connection with the sale of certain non-traditional ETFs. Specifically, Berthel Fisher did not fully assess the features or risks associated with these ETFs during the relevant period, and did not adequately train registered representatives regarding these products. Accordingly, it found Berthel Fisher did not have a reasonable basis for recommending the sale of any of these products. As a dug deeper, FINRA discovered Berthel Fisher also did not conduct adequate supervisory reviews of non-traditional ETF transactions and did not adequately monitor positions to detect and prevent unsuitable buy-and hold strategies in customer accounts. Berthel Fisher therefore violated NASD Rule 3010(a) and (b), NASD Rule 2310 and FINRA Rule 2010.
Finally, FINRA found multiple remote offices supervisory lapses. For example, Berthel Fisher did not implement a supervisory system, by among other things, neglecting to conduct adequate audits of the branch office and neglecting to conduct timely reviews of emails from the branch. Based on this conduct, Berthel Fisher further violated NASD Rule 3010 and FINRA Rule 2010. Berthel Fisher also failed to retain emails for certain email domains, including the primary domains used by Berthel Fisher and therefore violated Section 17(a) of the Securities Exchange Act of 1 934 (the “Exchange Act”), Rule 17a-4 thereunder, NASD Rule 3110(a), NASD Rule 2110, and FINRA Rule 2010.
Notwithstanding the widespread misconduct and rule violations, Berthel Fisher was spared the punishment it deserved and only received the following sanctions: a censure and a fine of $675,000 and was only ordered to pay restitution to customers in the total amount of$13,292.53.
FINRA Sanctions Berthel Fisher For Not Supervising Private Placement Sales
Over the years, Berthel Fisher has participated in a number of private offerings of securities. However, during the relevant period, Berthel Fisher’s written supervisory procedures were deficient relating to private offerings of securities.
Among other things, the written procedures did not reference how Berthel Fisher would monitor for compliance with the applicable rules and regulations relating to private offerings of securities. Further, the written procedures did not provide any detail regarding the method or manner in which any supervision of private offerings of securities was to occur. Moreover, the written procedures also did not identify any Berthel Fisher associated person responsible for compliance with respect to rules and regulations relating to private offerings of securities. In addition, the written procedures failed to describe what steps a Berthel Fisher associated person, who would be responsible for monitoring for compliance with respect to private offerings, should take if potential violative activity was discovered. Finally, Berthel Fisher’s written procedures failed to describe how a Berthel Fisher associated person, who would be responsible for monitoring for compliance with respect to private offerings, would document their oversight of private offerings of securities.
FINRA concluded that those acts, practices and conduct constitute separate and distinct violations of NASD Conduct Rules 3010(b) and 2110 by Berthel Fisher and slapped it on the wrist with a censure and small fine.
FINRA Sanctions Berthel Fisher For Not Supervising Options Transactions
During the relevant period, a Berthel Fisher financial advisor recommended and executed options transactions in the accounts of customers without having reasonable grounds for believing that these recommendations were suitable for the customers on the basis of the customers’ investment experience, financial situation and/or age.
Berthel Fisher’s registered options principal, was responsible for supervising the options transactions recommended and executed by the stockbroker. As a result of FINRAs investigation, it determined that the firm’s option principal failed to adequately supervise the representative who was allowed to recommend and execute these options transactions when the manager knew or should have known that these transactions were unsuitable for the customers. Through these acts, Berthel Fisher and its option principal violated NASD Conduct Rules 3010(a) and 2110 but were only jointly and severally fined $10,000. The manager was suspended for 10 days.
*Above are only some of the regulatory disciplinary actions filed against Berthel Fisher by FINRA. NASSA and other state securities regulator investigations and enforcement actions account for another almost 20 more BrokerCheck disclosures.
Did Berthel, Fisher & Company Financial Services, Inc. Advisor Misconduct Cause You Investment Losses?
When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Berthel Fisher is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors.
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 Berthel Fisher without representation with an attorney about their complaints and have their complaints denied.
Related Read: Can You Sue Your Brokerage Firm?
Berthel Fisher Investors in Iowa and Across the Midwest
Berthel Fisher is headquartered in Cedar Rapids, Iowa, and the Law Offices of Robert Wayne Pearce, P.A. represents investors throughout Iowa and the surrounding Midwest.
Investors with similar brokerage disputes can also review resources from an Illinois investment fraud lawyer, Minnesota investment fraud lawyer, Wisconsin investment fraud lawyer, Missouri investment fraud lawyer, or Nebraska investment fraud lawyer.
Consult With An Attorney Who Recovers Investment Losses Caused By Berthel, Fisher & Company Financial Services, Inc. Today
The investment fraud lawyers at the Law Offices of Robert Wayne Pearce, P.A. represent investors nationwide in claims involving unsuitable recommendations, excessive trading, alternative investments, private placements, negligence, fiduciary breaches, supervisory failures, and other securities misconduct.
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.
