As a financial analyst and legal expert with over a decade of experience across both sectors, I’ve seen firsthand how the complex worlds of finance and law intersect. My work has spanned detailed financial analyses, thorough legal research, and crafting articles that illuminate the often opaque topics of investment strategies and compliance laws. Today, I want to shed light on the serious allegations against Tamber Proctor, an investment adviser registered with Proctor Investments, and what this case means for investors.
Allegation’s Seriousness and Impact on Investors
On September 16, 2024, a group of investors filed a dispute alleging that Mr. Proctor recommended unsuitable investments, including real estate and mutual fund products. This pending dispute seeks alleged damages of $324,000. The gravity of this case cannot be overstated:
- Unsuitable investment recommendations breach the fiduciary duty that advisers owe to their clients
- Investors can suffer substantial financial losses due to inappropriate advice
- Cases like this erode public trust in financial professionals and institutions
As the famous investor Warren Buffett once said, “Risk comes from not knowing what you’re doing.” When advisers fail to thoroughly understand their clients’ needs and risk tolerances, they put investors’ financial futures in jeopardy. Sadly, Proctor’s case is not unique – studies estimate that bad financial advisors cost Americans up to $17 billion per year.
Proctor’s Background and Past Complaints
A review of Mr. Proctor’s Financial Industry Regulatory Authority (FINRA) BrokerCheck report reveals that this is not the first dispute involving his conduct. Between 2017 and 2020, two other groups of investors filed claims alleging:
- Unauthorized trades
- Unsuitable investments in FS Energy & Power and Northstar Healthcare
- Failure to disclose risks
- Breach of contract and fiduciary duty
His former member firm settled these disputes for over $19,000 in total. As an adviser with 23 years of experience who has passed multiple industry exams, Mr. Proctor should be well-versed in his obligations to clients. These past complaints raise serious red flags. According to FinancialAdvisorComplaints.com, a website that tracks misconduct in the financial industry, complaints like these are all too common and can have devastating consequences for investors.
Risks of Non-Traded REITs Explained
Non-traded real estate investment trusts (REITs) like Northstar Healthcare, which was mentioned in the previous disputes against Proctor, can present major risks to investors:
- Lack of liquidity – shares don’t trade on public exchanges, making them hard to sell
- High fees, especially for early redemption
- Lack of public information and disclosures compared to publicly-traded REITs
- Distributions are not guaranteed
FINRA has cautioned that non-traded REITs are unsuitable for many investors. In 2011, they issued an investor alert highlighting the risks and complexities of these products. Advisers have a duty to fully explain these risks to clients before recommending such investments.
Consequences and Lessons Learned
Cases like this serve as a stark reminder of the immense responsibility that financial professionals bear. Unsuitable investment advice can have devastating consequences for individuals and families. Investors who have suffered losses due to improper conduct may have grounds to pursue arbitration and seek to recover damages.
Some key lessons and warnings for investors:
- Always carefully review an adviser’s background and disciplinary history
- Make sure you fully understand the risks of recommended investments
- Be wary of “can’t miss” opportunities or pressure to invest in illiquid, complex products
- Ensure your portfolio is appropriately diversified based on your goals and risk tolerance
If you have any concerns about your investments or adviser, I urge you to reach out to experienced counsel. Firms like MDF Law offer free consultations and have helped investors recover tens of millions of dollars in damages.
The financial world can be intimidating, but you don’t have to navigate it alone. By staying informed, asking questions, and knowing your rights, you can protect yourself and secure your financial future. As we continue to follow the case against Tamber Proctor, let it be motivation to remain ever-vigilant as investors.
