Richard Pittman (CRD#: 2845145), a registered representative with Cetera Advisors LLC in Memphis, Tennessee, is currently involved in a pending customer dispute in which a client alleges that Richard Pittman recommended unsuitable investments in 2008, according to his BrokerCheck record accessed on October 23, 2019. The investments in question involve oil and gas, as well as limited partnerships (in which an investor’s liability is limited to the amount they invested in a given business venture). The client, who filed the complaint on September 24, 2019, is seeking $150,000 in damages; the matter is pending.
This is not the only instance in which a client has alleged that Richard Pittman recommended unsuitable investments in 2008. The other three disclosures on Richard Pittman’s BrokerCheck involve the same allegations. On October 19, 2016, another client sued Richard Pittman for $200,000. The matter was ultimately settled for $75,000. On August 9, 2018, a client filed a complaint against Richard Pittman, requesting $736,000 in damages. The dispute was settled for $95,000. Just three months later, on October 31, 2018, a client sought $200,000 in damages, and the matter was settled for $75,000. All the investments involved oil and gas, as well as real estate. Real Estate Investment Trusts (REITs) are illiquid and are not suitable for investors who want to be able to easily convert their assets to cash should the need arise.
What does Richard Pittman have to say in response to these allegations? According to his Broker Comment, he “asserts that the investments were suitable at the point of sale, when suitability is determined. Later performance does not and cannot affect the initial suitability determination. Matter settled by the prior BD as a business decision.” Registered representatives have a responsibility to recommend suitable investments to their clients, considering their risk tolerance, long-term goals, and need for liquidity, along with other factors. If the recommended investments later performed such that a client lost a significant amount of money, it is possible that the registered representative placed the client in investments that were too risky given their unique goals and needs.