FINRA Says National Planning Corp. Liable for $6.2M Arbitration Award

A top independent broker/dealer has been ordered to pay a $6.2 million arbitration award to two Minnesota investors in a claim involving real estate investments (REITs).

A three-person panel of the Financial Industry Regulatory Authority (FINRA) issued the award against National Planning Corp. in favor of investors Ronnie and Stacy Erickson and various trusts on their behalf on Nov. 18.

In their claim, the investors cited allegations of breach of fiduciary duty against National Planning Corp. and a former broker, Christopher R. Olson. Other causes of action in the Ericksons’ claim included negligence, misrepresentation and violation of other industry rules.

NPC is part of National Planning Holdings Inc., a network of four broker/dealer firms that are owned by Jackson National Life Insurance Co.

As reported by Investment News, the Ericksons’ complaint focused on real estate investment trusts and other private real estate investments. While the award doesn’t list the specific REITs in which the Ericksons were invested, it does state that the other real estate investments were in a company called Waterway Holdings Group. That company was owned by the one-time NPC broker, Olson, and another employee of Preferred Resource Group Inc., a Minneapolis network of financial consultants, certified public accountants and attorneys.

In the award, the Ericksons said that they “had to satisfy outstanding loan amounts on mortgages on the real estate investments in order to prevent foreclosure.” They also alleged that Olson manipulated them into undertaking significant debt, paying millions of dollars in cash that cannot be recovered, and liquidating, annuitizing and structuring their investment assets earmarked for retirement to pay the staggering debt obligations related to the real estate investment recommendations.”

According to FINRA’s BrokerCheck system, Olson resigned from NPC in March for “failure to disclose outside business activities and failure to disclose client involvement in said activities.”  One month later, he was registered with Berthel Fisher & Co. Financial Services.