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FINRA Punishes Former Harvest Capital Broker for Unsuitable Non-Traded REIT Sales

The Financial Industry Regulatory Authority suspended a former Harvest Capital rep for one month for allegedly engaging in unsuitable non-traded REIT sales with three clients, according to a letter of acceptance, waiver and consent issued by the regulators.

According to FINRA, while associated with Harvest Capital between February 2007 and May 2012, Jeffrey Paul Davis allegedly recommended that three of his customers invest in non-traded REITs, which resulted in an over-concentration of their assets in an illiquid investment.

The customers’ investments totaled $566,000, and represented between approximately 30 percent and 52 percent of their liquid net worth. FINRA said that the “excessive concentrations in illiquid investments were unsuitable in light of the customers’ financial situations, risk tolerances and investment objectives.”

FINRA believes that Davis violated NASD Conduct Rules 2310 and 2110 and FINRA Rule 2010. He was suspended from associating with any FINRA member for one month and issued a $5,000 fine.

Davis, who is currently registered with Kovak Securities, does not have any relevant formal disciplinary history with the Securities and Exchange Commission, any self-regulatory organization or any state securities regulator. He accepted and signed the AWC letter without admitting or denying the findings.

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