REIT Fraud Alert – Paul Larsen

The average stockbroker has no disclosure events on his or her record. That is pretty admirable.  A tiny percentage have 3 or more. And then there is Paul Larsen (Paul Cragg Larsen). According to the Financial Industry Regulatory Authority – FINRA – Larsen racked up 15 events in just 4 years.

For those new to this blog, a disclosure event is a regulatory action, sanction, lawsuit, customer complaint, criminal conviction or termination. Larsen was tossed from the industry – permanently barred – by regulators in 2011 after failing to turn over information and documents to authorities. That didn’t stop the complaints, however. They were just starting.

According to FINRA documents and published sources, Paul Larsen had a penchant for selling nontraded REITs, oil and gas investments and Tenant-in-Common investments. Unfortunately, his clients claim they lost millions of dollars based on Larsen’s recommendations.

Larsen denied the charges, but several of the cases have been settled and many others remain pending.

Stockbrokers have the responsibility to insure the investments they recommend to their clients are suitable. According to one report, Larsen preyed on retirees and exploited church connections to gain their trust. In the reported case, Larsen had a retired couple cash in their retirement monies (which were conservatively invested) and instead invest in speculative and illiquid alternatives.

Obviously, the couple was financially devastated.

Why would a stockbroker do such a thing? Money and commissions. Money already invested in a conservative mutual fund might be very suitable for an elderly couple but it does nothing for the stockbroker or his firm. Nontraded REITs and TIC investments, however, typically pay big commissions.

When that happens, the broker wins. The brokerage firm wins. And the clients are often left penniless.

Even before getting barred from the securities industry, Paul Larsen was terminated by his employer in 2010, VSR Financial Services, after a customer complained that Larsen illegally took their funds in a tenant in common (TIC) transaction.

Brokerage firms such as VSR Financial Services are responsible for the conduct of their stockbrokers. Even if the broker is selling investments without the permission of the firm, the brokerage firm still has an independent duty to supervise.

According to FINRA, Paul Larsen was last known to be selling insurance and / or real estate at two different businesses, ICG Advisors and Paul C. Larsen P.A., both in Naples, Florida.

FINRA reports that Larsen worked as a stockbroker since 1982. His troubles appear to have begun while working at VSR Financial Services where he worked from June 2004 until his termination in September 2010.

If you invested through Paul Larsen and lost money, you may be entitled to reimbursement from VSR Financial and Larsen. There is a limited time to bring stockbroker fraud cases – including cases for Tenant in Common and REIT losses – so the time to act is now.

For more information about Paul Larsen or to see if you have a potential claim for a failed REIT or section 1031 like kind exchange tenant-in common investment, give us a call.

About the author. Brian Mahany is an attorney and has prosecuted many cases involving TIC investments marketed by Carlton Cabot and Cabot Investment Properties. He works with Chapman Law on cases involving other TIC investments, Real Estate Investment Trusts (REITs), oil and gas investments and other illiquid and speculative investments.

One thought on “REIT Fraud Alert – Paul Larsen

  1. Pingback: Corporate Agribusiness “Land Grabbers” in Northern Mozambique. Colonial-Style Scramble for Africa’s Farmlands | TAR News

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>