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CMD Investigating Claims Against VSR Financial Services, Inc. for Fraud

Carmel, Milazzo & DiChiara LLP (CMD) is investigating potential claims against Overland Park, Kansas based firm, VSR Financial Services, Inc. (VSR), and securities broker John Towers for fraud.

A a 70-year-old Texas retiree, and former client of VSR Financial Services, Inc.  has filed a claim against the firm and former broker John Towers alleging that they put his life savings into illiquid “alternative” investment programs and other non-conventional investments against in his instructions.

The client alleges he suffered losses in excess of $845,807 due to alleged fraud, violations of the Texas Securities Act, breach of contract, breach of duty, negligence, and failure to supervise and secondary liability. He seeks actual damages, well-managed account damages, benefit-of-the-bargain damages, rescission, disgorgement of fees and commissions, punitive damages, attorneys’ fees, and interest.

The FINRA filing alleges VSR put clients into unsuitable investments such as non-traded REITs, public REITs, equipment leasing programs, oil and gas drilling programs, promissory notes, and commodity funds. These alternative investments are perennial Top Ten Investor Traps, according to the North American Securities Administrators Association (NASAA).

As of April 2016, regulatory records indicate at least 30 customer complaints for alleged misconduct, including unsuitability, self-dealing and misrepresentations, as well as two regulatory actions, against Mr. Towers. In 2015, FINRA censured and fined VSR $550,000 for failure to supervise unsuitable sales of non-conventional investments.

Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock, bond or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of securities laws. 

Investors are protected against fraudulent securities activities by several different civil laws. First, the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) and Rule 10b-5 protect investors against deceptive and manipulative acts in the purchase or sale of securities. This sweeping legislation is the cornerstone of federal securities laws. Rule 10b-5 makes it unlawful to employ a device or scheme to defraud, to make any untrue statement of material fact or omit to state a material fact not misleading, or to engage in any practice that would operate as a fraud.

If you or someone you know lost money investing in or with VSR Financial Services, Inc. and/or John Towers, you may be entitled to recover your investment losses through FINRA arbitration. CMD accepts cases on a contingency fee basis, which means we only get paid if you get paid.  Your time to file a claim may be limited, so contact us today at (212) 658-0458 or for a free and confidential case evaluation.