Colorado Financial Service Corporation Lawsuit & Complaints: FINRA Fines Firm Over High-Risk Closed-End Funds
FINRA reportedly fined Colorado Financial Service Corporation $45,000 on September 9, 2026, for allegedly failing to supervise brokers who recommended high-risk closed-end funds to customers. The White Law Group is investigating Colorado Financial Service Corporation complaints on behalf of investors. Here’s what’s on the firm’s record and what your options may be.
If you lost money on investments recommended by a Colorado Financial Service Corporation broker, you may be able to recover your losses through FINRA arbitration.
FINRA Fines Colorado Financial Service Corporation Over Closed-End Funds
According to a FINRA Letter of Acceptance, Waiver, and Consent (AWC), from March 2021 to at least February 2023, the firm allegedly failed to supervise recommendations of closed-end funds that invested in high-yield, below-investment-grade debt. Some of these funds used leverage. FINRA alleged that all of them were inconsistent with the customers’ investment profiles, in violation of Regulation Best Interest and FINRA’s supervision rules.
The AWC describes a former broker who allegedly recommended that a senior customer with moderate risk tolerance and low income put 100% of her stated net worth into seven high-risk closed-end funds. She lost $29,049. The same broker allegedly put a low-risk trust for an educational entity entirely into one of these funds. FINRA alleged the firm missed the red flags in both accounts.
The firm was censured, fined $45,000, and ordered to pay $29,049 in restitution plus interest. It neither admitted nor denied the findings.
Colorado Financial Service Corporation’s Regulatory History
Colorado Financial Service Corporation is a broker-dealer and investment adviser based in Centennial, Colorado. It has been a FINRA member since December 2000. As of the 2026 AWC, it employed 35 registered representatives at 13 branch locations. Its BrokerCheck report shows four regulatory events.
September 16, 2024: $50,000 FINRA Fine for Anti-Money Laundering Failures. FINRA alleged the firm’s anti-money laundering procedures could not detect suspicious trading, including possible prearranged trades in a low-priced, thinly traded stock. The firm allegedly relied only on a manual review of its daily trade blotter. It also allegedly failed to investigate after its clearing firm raised concerns about the same two customers.
September 25, 2014: SEC Order and $25,000 Penalty. The SEC alleged the firm mishandled customer funds in two private placements in 2010. In one, the firm held customer money itself, which allegedly violated net capital and customer protection rules. In the other, it allegedly sent investor money straight to the issuer instead of the escrow agent. The firm was censured, ordered to cease and desist, and paid a $25,000 penalty.
February 19, 2014: $10,000 FINRA Fine for Supervisory Failures. FINRA alleged the firm manually reviewed as little as 0.1% of its archived emails for part of the review period. FINRA also alleged the firm lacked adequate procedures for due diligence on private placements and non-traded REITs.
Colorado Financial Service Corporation Brokers and Investor Complaints
Victor Lessinger (CRD# 830821): FINRA suspended Lessinger in 2024 over allegations that he recommended high-risk closed-end funds that were not in a senior customer’s best interest.
Russell “Russ” Fieger (CRD# 4122326): A customer filed a FINRA arbitration claim against Fieger in November 2024. The claim alleges unsuitable recommendations, including oil and gas programs and overconcentration in risky investments. Fieger has also faced action by Kansas regulators.
Michael Mendenhall (CRD# 496391): Mendenhall, a former broker at the firm, was convicted on 25 counts of securities fraud and theft involving elderly victims and more than $1.4 million in losses. He was sentenced to 30 years in prison in 2013.
Contact The White Law Group About Colorado Financial Service Corporation Complaints
If a Colorado Financial Service Corporation broker put you into high-risk closed-end funds or other unsuitable investments, you may be able to recover your losses through FINRA arbitration.
The White Law Group is a national securities fraud law firm with offices in Chicago and Seattle. Our attorneys have handled more than 800 FINRA arbitration claims on behalf of investors. Call us today at (888) 637-5510 for a free consultation, or contact us online.
Frequently Asked Questions
How do I file a claim to recover money I invested through a Colorado Financial Service Corporation broker?
Most investors recover losses by filing a FINRA arbitration claim rather than a court lawsuit. Most brokerage account agreements typically include a pre-dispute arbitration clause, which many investors don’t know is there. Arbitration can still result in a monetary award, much like a lawsuit.
What makes high-risk closed-end funds unsuitable for some investors?
Some closed-end funds invest in junk bonds and use borrowed money, which can make losses pile up quickly. Putting a large share of your savings into them can be unsuitable, especially for retirees or conservative investors. Under Regulation Best Interest, a broker must put your interests first and recommend investments that fit your risk tolerance and goals.
Can the firm be held responsible for my losses, even if a broker made the recommendation?
Yes, a brokerage firm may be liable for failing to supervise its brokers. FINRA rules require firms to catch red flags, such as heavy concentration in one type of investment or products that don’t match a customer’s risk profile. In this case, FINRA alleged the firm missed exactly those red flags.
