Advisor Ordered to Pay $17.7 Million Over unsuitable REIT Sales

Posted on March 18th, 2025 at 3:33 PM
Advisor Ordered to Pay $17.7 Million Over unsuitable REIT Sales

From the desk of Jim Eccleston at Eccleston Law

A FINRA arbitration panel has ordered former advisor Mark Sam Kolta to pay nearly $17.7 million in damages, plus interest and costs, to his former firm, National Securities, following allegations of breach of contract and unjust enrichment. According to Financial Planning, the award stems from Kolta’s alleged involvement in placing clients in unsuitable private real estate investment trusts (nontraded REITs) while at National Securities.

Kolta, who has faced 28 customer complaints since 2018, allegedly steered 16 clients into alternative investment vehicles, moving $4.8 million into nontraded REITs. FINRA accused him of earning $290,000 in commissions while his clients suffered substantial losses. The regulator also found that Kolta failed to consider clients' financial situations, investment objectives, and risk tolerance. In some cases, he allegedly falsified documents to make investors appear more qualified for high-risk investments than they actually were.

In August 2023, a FINRA disciplinary panel barred Kolta from the securities industry and ordered him to disgorge $297,823 in ill-gotten gains, along with paying $6,041.61 in hearing costs. He has since appealed the decision to FINRA’s National Adjudicatory Council.

B. Riley Financial, which acquired National Securities in installments between 2018 and 2021, paid most of the investor settlements resulting from Kolta’s actions. As reported by Financial Planning, CEO Michael Mullen stated that B. Riley supported the settlements to ensure harmed investors were compensated.

Kolta filed a counterclaim against National Securities seeking damages and attorneys’ fees. However, he did not attend the evidentiary hearing before the FINRA panel, leading to the dismissal of his claim.

Securities expert Douglas Schulz questioned how Kolta was able to remain in the industry for so long despite his extensive disciplinary record. Schulz emphasized the need for stricter oversight of high-risk advisors, stating, “If you are going to hire them, you have to supervise them. And if they continue to do questionable things, you need to get rid of them.”

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

I just received this letter from the CFP Board. Thank you, Thank you, THANK YOU!

David Y

LATEST NEWS AND ARTICLES

October 17, 2025
FINRA Fines Oak Hills Securities for Private Placement Misconduct

The Financial Industry Regulatory Authority (FINRA) has censured and fined Oak Hills Securities Inc., an Oklahoma City brokerage, for multiple rule violations over five years.

October 16, 2025
FINRA Suspends Former Citigroup Advisor Over Undisclosed Business Activities

The Financial Industry Regulatory Authority (FINRA) has suspended former Citigroup representative Maximiliano Ramirez and fined him $5,000 for engaging in undisclosed outside business activities and investments.

October 15, 2025
SEC Accuses Florida Insurance Agent of $52 Million Unregistered Securities Scheme

The U.S. Securities and Exchange Commission (SEC) has filed a complaint against Florida insurance agent Charles D. Oliver, alleging he illegally sold about $52 million in unregistered oil and gas securities to roughly 50 retail investors, including retired seniors.