The Wolper Law Firm, P.A. Has Filed A FINRA Arbitration Claim Against Capital Financial Services For The Unlawful Sale Of Illiquid Oil & Gas, LPs And Non-Traded REITs

• November 7, 2018
• capital financial services
• REIT

The Wolper Law Firm, P.A. announces that it has filed a FINRA arbitration claim against Capital Financial Services based on the unlawful recommendations made by its financial adviser, Steven Knuttila, who has thirty-two (32) customer complaints against him for alleged sales practice violations. Steven Knuttila has recently been barred from the securities industry by FINRA.

The Statement of Claim filed with FINRA alleges:

“This case is about the unlawful sale of speculative and unsuitable oil and gas limited partnerships (“Oil and Gas L.P.s”) issued by U.S. Energy and various non-traded real estate investment trusts (“Non-Traded REITs”) issued by Steadfast and American Realty Capital to unsophisticated and unaccredited investors. Claimants were told by their Financial Advisor, Steven Knuttila, who was recently barred from the securities industry by FINRA, that the disputed investments were consistent with Claimants’ desire to generate a modest level of growth and income. This was false. Mr. Knuttila misrepresented the characteristics and risks of the investments, failing to disclose, among other things, that the disputed investments were speculative in nature and completely illiquid.

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Mr. Knuttila presented Claimants with an opportunity—which he described as exclusive—to invest in the U.S. Energy Strategic Income Fund II, L.P. Claimants were unfamiliar with the company, U.S. Energy, or the U.S. Energy Strategic Income Fund II, L.P., and relied on Mr. Knuttila’s purported expertise.

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Between late 2014 and early 2016, the price of oil dropped more than 50%. This decline caused many energy companies to suspend or completely abandon exploration efforts. It also forced many public and privately held companies within the energy sector into bankruptcy. For investors, like Claimants, the income either declined or stopped altogether, and the principal value of their investments plummeted.

The sale of esoteric products is a growing trend in the securities industry, particularly among independent brokers, due to the high commissions. These structured products generated commissions of approximately 8%-10%. It is alleged that Steven Knuttila made the aforementioned recommendations in order to secure larger commissions, as opposed to putting Claimants’ interest ahead of their own.

If you or someone you know are clients of Capital Financial Services or Steven Knuttila, and you experienced investment losses, please contact the Wolper Law Firm at 800.931.8452 or by email at mwolper@wolperlawfirm.com to discuss your specific situation and the legal options available. The Wolper Law Firm represents investors nationwide in securities litigation and arbitration.

Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters.