The Massachusetts Securities Division has fined Texas-based broker-dealer and investment adviser, NEXT Financial Group $150,000 over unsuitable sales of non-traded real estate investment trusts to Massachusetts investors and its failure to supervise the agent who sold the investments.
The investigation into NEXT was opened after regulators received a complaint from a retired veteran in July 2017. Over the course of the investigation, the Division discovered multiple sales of non-traded REITs that exceeded NEXT’s own guidelines regarding the concentration of a customer’s liquid net worth in alternative investments.
The consent order states that over a period of nearly six years, NEXT processed many transactions which exceeded its own written liquid net worth concentration guidelines. The Division also identified sales of non-traded REITs to investors over the age of 80, which is also contrary to NEXT’s written supervisory procedures.
In addition to the $150,000 fine, the consent order requires NEXT to offer restitution to the Massachusetts residents who were sold unsuitable investments.