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John Demertzis of LPL Financial: $700k Customer Complaint

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Updated on: September 8, 2023

Investment Losses with John Demertzis at LPL Financial in East Setauket, NY? Contact KlaymanToskes

National investment loss lawyers KlaymanToskes is investigating John Demertzis (CRD# 2690132) of LPL Financial, following the filing of a customer complaint alleging $700,000 in investor damages due to unsuitable investment recommendations in real estate related Alternative Investments. 

Investors that suffered losses with John Demertzis at LPL Financial in East Setauket, NY are encouraged to contact attorney Lawrence L. Klayman, Esq., for a free consultation to discuss recovery options at 888-997-9956 or lawrence@klaymantoskes.com. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.

John Demertzis: $700k Investor Complaint at LPL Financial

According to FINRA BrokerCheck, John Spyro Demertzis has been hit with a customer complaint alleging $700,000 in damages due to unsuitable recommendations to invest in alternative real estate investments. The customers further allege Demertzis made unsuitable recommendations to hold the alternative investments. 

What Are the Risks of Alternative Investments?

Alternative investments include Non-traded REITs, Business Development Companies (BDCs), Private Placements, Direct Participation Partnerships (DPPs) & Limited Partnerships (LP Interests), 1031 Exchanges, Hedge Funds, and Oil & Gas investments. 

These investments may be unsuitable for investors with a need for financial security and an ability to readily access funds when needed, such as elders and retirees, due to their illiquidity, high risk levels, lack of regulatory oversight, and complex nature. 

In addition, alternative Investments may be misrepresented by brokers/advisors who fail to fully disclose the risks and liquidity problems involved to their customers, as these investments are often high-risk, have limited liquidity, and carry high expenses and fees. 

Alternative Investments typically involve many risks for investors, including the following: 

Illiquidity: 

  • Alternative Investments commonly exhibit low liquidity, often spanning from a monthly withdrawal possibility to being locked in for over 12 years. 
  • As a result, these investments can pose challenges when it comes to selling them, and are likely only suitable for investors who can afford to have their funds tied up for long holding periods, sometimes decades. Investors who want to withdraw their funds early may face high and unexpected fees.

Regulatory Issues:

  • Alternative Investments are usually private, as opposed to being publicly traded. These investments are often not subject to regulatory reporting requirements. 
  • The underlying assets of Alternative Investments are often difficult to evaluate, resulting in difficulties concerning pricing and transparency.

Complexity:

  • Alternative Investments can be complex, demanding a higher degree of investigation and due diligence by brokers/financial advisors than other investments. 
  • Historically, alternative investments were exclusively accessible to institutional and affluent investors. Over recent years, however, the investments have surged in popularity and are progressively becoming part of the investment portfolios held by individual investors.

Your brokerage firm and advisor are obligated to recommend a suitable portfolio according to your net worth, age, risk tolerance, and other factors. If they do not, you may be entitled to a financial recovery.

If you suffered Alternative Investment losses due to your brokerage firm/financial advisor, contact attorney Lawrence L. Klayman, Esq. at (888) 997-9956 or lawrence@klaymantoskes.com for a free and confidential consultation.

What Is Considered an Unsuitable Alternative Investment?

FINRA (Financial Industry Regulatory Authority) is the self-regulatory organization responsible for registering and regulating every broker and brokerage firm engaging in business with retail customers. Under FINRA suitability requirements (FINRA Rule 2111) brokers/advisors and their firms have a duty to recommend suitable financial products and trading strategies based on their client’s financial interests and needs.

Facts about each investor, such as their financial situation/needs, age, employment status, tax status, investment objectives and experience, risk tolerance, and what other investments they may be holding must be taken into consideration by brokers/financial advisors in order to meet the “reasonable diligence” requirement of FINRA’s suitability rule. These factors help determine the suitability of a particular investment or investment strategy for a particular investor.

If your stockbroker or financial advisor recommended unsuitable alternative investments based on your investment profile or disregarded your risk-tolerance when making investment recommendations, you may be entitled to a financial recovery through FINRA arbitration.

Customers of John Demertzis and/or any other broker/investment advisor at LPL Financial who suffered investment losses are encouraged to contact attorney Lawrence L. Klayman, Esq. at (888) 997-9956 or lawrence@klaymantoskes.com for a free and confidential consultation to discuss legal options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you. 

About KlaymanToskes

KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.

Contact

KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lawrence@klaymantoskes.com
www.klaymantoskes.com