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

We just wanted to say thanks for your work in helping us get back some of the money we lost. We are not by any means rich, but we have saved some money and we have done so through a tight-fisted approach to most everything we do. So losing a significant chunk of money hurt…especially at a time when everyone else was growing their accounts. We really appreciate the work you did.

Allan and Adele

LATEST NEWS AND ARTICLES

July 1, 2025
State Regulators Fine Five Major Broker-Dealers Nearly $10 Million for Excessive Commission Charges

A coalition of state securities regulators has ordered five broker-dealers — including Edward Jones, LPL Financial, RBC, Stifel, and TD Ameritrade — to pay almost $9.9 million in penalties for overcharging customers on small-value trades.

June 30, 2025
SEC Charges New Mexico Investment Advisor with Fee Fraud and Fiduciary Breaches

The Securities and Exchange Commission (“SEC”) has charged David A. Nagler and his firm, New Line Capital LLC, with defrauding clients through deceptive fee disclosures and undisclosed conflicts of interest.

 

June 27, 2025
FINRA Sanctions Advisor for Accepting $1 Million Inheritance from Client Without Firm Approval

FINRA has fined and suspended veteran advisor Kenneth J. Malm for accepting a $1 million inheritance from a client without receiving the necessary firm approval.