Berthel, Fisher and Co.: Complaints and Regulatory Actions

The White Law Group reviews the regulatory history of Berthel, Fisher and Company Financial Services.  

The White Law Group is investigating potential securities claims involving Berthel Fisher and Company Financial Services. (CRD#: 13609)

The following is a review of publicly available information regarding Berthel, Fisher and Company and its securities sales practices and FINRA regulatory history. FINRA is the self-regulator that oversees brokers and brokerage firms. 

Berthel, Fisher and Company  is a dual registered broker-dealer and investment advisor firm based in Cedar Rapids, Iowa. Although Berthel, Fisher has a solid reputation in the securities industry, investors should know that the firm does have numerous reportable events on its FINRA Broker Report (or CRD).

Berthel Fisher and Co. reportedly has 42 disclosure events on its CRD/ broker report, including 27 regulatory events and 14 arbitrations.  

Regulatory actions taken against a broker-dealer may include censures, fines, suspensions and restitution, among others. They can have serious consequences for a broker-dealer’s profile and reputation. The following is a review of FINRA and the SEC’s regulatory actions and lawsuits involving Berthel Fisher and Co.

Berthel Fisher has $32.1 Million in Pending Lawsuits

April 6, 2023:  Investment News reported that at the end of 2022 Berthel, Fisher had $32.1 Million in pending claims, eight times what they had the previous year. The firm has been known to offer a variety of high risk, alternative investments, which could explain the excessive number of investor complaints. 

The firm has been the subject of investigations conducted by FINRA, the Missouri Securities Division, the Nebraska Department of Banking and Finance, and the State of North Dakota (among others).  These regulatory investigations involved the following alternative investment products: options, real estate investment trusts (REITs), limited partnerships and other direct investments, and variable annuities. 

The firm has also been named in 14 FINRA arbitration claims filed by investors.  These lawsuits involved various investment types and causes of action. 

Arbitrations on a broker-dealers CRD (Central Registration Depository) refer to the resolution of disputes between a broker-dealer and a client or between broker-dealers themselves through the FINRA arbitration process. When a client or another broker-dealer files a complaint against a broker-dealer, the complaint may be resolved through arbitration, which is a process where an independent third party (the arbitrator) hears both sides of the dispute and makes a binding decision. 

Berthel Fisher – Broker Misconduct and Customer Complaints 

There have been several cases of registered representatives employed by Berthel, Fisher and Company who were allegedly involved in broker misconduct and fraudulent activities.  

September 20, 2024: A Berthel Fisher representative located in Jacksonville, Illinois was reportedly barred from working as a broker after he was dismissed for allegations of taking a loan from customers against FINRA rules.

January 2020: FINRA reportedly suspended Mason Gann in January 2020, according to a Letter of Acceptance, Wavier and Consent. Gann allegedly recommended and effected a risky options-trading strategy in the account of a retiree and senior investor who had limited income, modest retirement savings, and minimal investment knowledge. According to FINRA, Gann reportedly lacked a reasonable basis for believing that his options recommendations were suitable for the customer, given what Gann purportedly knew about the customer’s investment profile. 

According to his FINRA BrokerCheck report, Gann was registered with Berthel, Fisher & Company in Dallas, Texas from 2012 through 2018. He has four customer complaints on his record. Allegations include “unsuitable and risky investments,” among others. 

FINRA Sanctions Berthel Fisher for Failure to Supervise

We have previously reported several regulatory actions that FINRA has taken against Berthel Fisher and Company in the past few years.  

February 5th, 2018: FINRA charged Berthel, Fisher with failure to supervise a registered representative’s sale of unit investment trusts (UITs). The charges include structuring sales from 2013 to 2014 of UITs to clients in order to allegedly avoid reaching levels at which breakpoint discounts would kick in, thus increasing the broker’s commission, and at the same time harming clients. 

According to FINRA, Berthel, Fischer discharged the broker in September, stating they believed he did not adhere to a term of his heightened supervision agreement, which required him to run all business, including fixed indexed annuities, through the firm’s commission grid. 

The FINRA complaint alleges the representative generated more than $421,000 in commissions for himself and Berthel, Fisher, by recommending short-term trading of the UITs, inconsistent with the buy and hold design of the products and requiring clients to pay heavy sales charges. 

Mutual Fund Overcharges 

The Securities and Exchange Commission settled charges with Berthel Fisher & Company over claims it failed to disclose conflicts concerning recommendations of certain mutual fund share classes that included 12b-1 fees. The firm was censured and fined $235,000 plus more than $150,000 in disgorgement and pre judgment interest.  The firm also purportedly failed to disclose the inherent conflicts.  

Risky Options Trading 

April 26th, 2022: Again, FINRA censured and fined Berthel, Fisher & Co. — this time, $100,000.  

When reviewing a customer’s request for approval to trade options in his brokerage account, Berthel, Fisher allegedly failed to exercise due diligence to ascertain the customer’s investment experience and knowledge, according to an AWC.  

Between August 2015 and February 2018, one of the firm’s brokers purportedly recommended options transactions to the same customer without having reasonable grounds for believing that the transactions were suitable for that customer. At the same time, Berthel Fisher reportedly failed to establish and maintain a supervisory system, including written procedures, reasonably designed to achieve compliance with FINRA’s rules pertaining to the suitability of options trading in customer accounts. The firm also allegedly failed to enforce multiple provisions of its written supervisory procedures pertaining to options trading. 

FINRA Rule 3110 Supervision 

The Financial Industry Regulatory Authority (FINRA) has several rules in place to regulate broker-dealers, including the FINRA Rule 3110 Supervision rule. This rule requires broker-dealer firms to establish and maintain a system to supervise the activities of their associated persons (e.g., brokers) to ensure that they comply with securities laws and regulations. 

FINRA Rule 3110 also requires that broker-dealers establish a process for identifying and responding to red flags that may indicate potential violations or misconduct by associated persons. If your broker violated FINRA rules and you suffered investment losses, your firm may be held liable for failure to supervise. 

Class Action Lawsuit vs. Individual FINRA Arbitration Lawsuit

You may wonder whether a large class action lawsuit is a better litigation option than an individual FINRA arbitration lawsuit.  The answer depends on many factors, but typically if the loss sustained is large — say larger than $100,000 — an individual FINRA arbitration claim is likely a better option.  Class action lawsuits as a recovery option are more appropriate for grouping large numbers of individuals who have small claims – too small to generally pursue individually.

Help for Investors

If you have any questions about investment losses you made with Berthel Fisher and Co., or if you believe that you have been the victim of securities fraud, The White Law Group may be able to help.  To contact the firm, please call 888-637-5510 

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 800 FINRA arbitration cases.       

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.        

We have over 30 years of securities law experience and the experience to help investors defrauded in securities, investment attempt to recover their investment losses.  With offices are in Seattle, Washington and Chicago, Illinois, the firm reviews securities fraud cases throughout the country.