• Energy 11 has not made distributions to its limited partners since March 2020.
• Energy 11 owes its limited partners 18 months of unpaid distributions, totaling more than $36 million.
• On May 13, 2021, Energy 11 entered into a new loan agreement, borrowing approximately $40 million.
• According to the terms of the loan, Energy 11 is not allowed to make any distributions to limited partners until the loan balance is paid down from its current balance of $39 million to $30 million (representing one half of its current maximum borrowing amount of $60 million).
• Energy 11 is required to make a monthly payment of $1 million to pay down the loan’s principal. According to the firm’s most recent financial statements, based on its cash flow over the first six months of 2021, Energy 11 does not appear to be able to afford to pay down the loan balance any quicker.
• Even when Energy 11 does pay down the loan balance and is contractually able to resume distributions, Energy 11 is not required to resume distributions at that time.
• Energy 11’s debt has tripled since the end of 2018, whereas its assets have remained relatively stable.
• Based on the amount of Energy 11’s outstanding debt, unpaid distributions, and recent cash flow, investors are not likely to receive distributions anytime soon.

Customers of David Lerner Associates, Inc. that have purchased Energy 11 should contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of their legal rights.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as David Lerner Associates, Inc.

Energy 11, L.P.

Energy 11 is an illiquid, non-traded limited partnership sold as private placement security by David Lerner Associates, Inc. The limited partnership invests in the oil, gas, and energy sector, which has been extremely volatile the past several years. Energy 11 is not suitable for most conservative or retired investors.

Energy 11 sought to acquire interests in both producing and non-producing oil and gas properties located onshore in the United States. In other words, Energy 11 was speculating that non-producing leaseholds would eventually produce.

In March 2020, Energy 11 suspended distributions to its limited partners. Energy 11 currently owes 18 months of unpaid distributions to its limited partners, totaling more than $36 million.

However, pursuant to the terms of Energy 11’s latest loan agreement, Energy 11 cannot make any distributions until the loan is paid down to one-half of the account maximum borrowing amount of $60 million. The loan balance as of July 31, 2021, was $39 million. Accordingly, Energy 11 cannot resume distributions to investors until it pays down its current loan balance by $9 million, from $39 million to $30 million.

Energy 11 is required to make a monthly payment of $1 million to pay down the principal of the loan.

[On May 13, 2021, Energy 11 entered into a new $60 million revolving credit facility with BankFirst. At closing, the Partnership borrowed approximately $40 million. The proceeds were used to pay the $40 million outstanding balance and accrued interest on the Partnership’s prior loan arrangement. Any further advances under the revolving credit facility with BankFirst are to be used to fund capital expenditures for the development of the Partnership’s undrilled acreage. The revolving credit facility with BankFirst is secured by a mortgage and first lien position on at least 90% of the Partnership’s producing wells.]

Energy 11’s August 6^th letter to investors stated that the Partnership intends to pay down the loan balance from excess monthly cash flow. However, Energy 11 might not have enough excess cash flow to pay much more than the monthly minimum required amount of $1 million. According to Energy 11’s latest 10-Q filing with the SEC, the Partnership’s net cash flow from operating and investing activities for the first six months of 2021 was approximately $9.5 million, or an average of $1.58 million each month.

Based on Energy 11’s most recent financial statements and its cash flow over the first six months of 2021, Energy 11 does not appear to be able to afford to pay down the loan balance any quicker. Consequently, it is possible that Energy 11 will not be able to resume distributions for another 8 to 9 months.

Even when Energy 11 does pay down the loan balance and is contractually able to resume distributions, Energy 11 is not required to resume distributions at that time.

After paying down its loan balance, will Energy 11 be able to afford to pay back investors? The answer to that remains uncertain. However, the Partnership’s financials are not likely to give investors much confidence.

For starters, for each month that passes without the payment of distributions, the amount owed to limited partners, which was about $36 million at the end of June 2021, will likely grow by an additional $2.25 million.

In addition, over the past two and a half years, the Partnership’s debt has exploded. In contrast, the Partnership’s assets and revenues have not. From the end of 2018 through June 2021, Energy 11’s debt has tripled from approximately $17.5 million to around $53.5 million. While the Partnership’s liabilities have increased over 300%, the Partnerships’ assets only increased by approximately 5%, from about $323 million on December 31, 2018, to about $341 million on June 30, 2021.

Even assuming that Energy 11 gets back to 2018 income levels by 2022 ($18.6 million / year) (which one could argue is a generous assumption), it appears that it is going to take the Partnership years of good fortune to be able to pay down its debt, resume regularly scheduled distribution, and make past owed distributions to limited partners.

David Lerner Associates, Inc.

David Lerner Associates, Inc. (“David Lerner Associates”) is facing numerous customer complaints related to its sale and marketing of Energy 11, L.P. The complaints allege that Energy 11, an illiquid non-traded limited partnership that invests in the volatile energy sector, was unsuitable for investors with modest financial means, low or moderate risk tolerance, and liquidity needs. The complaints also include allegations that David Lerner Associates and its financial advisors misrepresented material features and risks associated with these illiquid, concentrated, and high-fee products, as well as ongoing misrepresentations related to when distribution payments would resume.

David Lerner Associates was the exclusive dealer-manager for Energy 11 and received 6% in selling commissions. David Lerner Associates is also entitled to a contingent incentive fee of up to an amount equal to 4% of gross proceeds of units sold. Based on public disclosures, it appears that David Lerner Associates has received over $22 million in seller commissions for selling Energy 11 to its customers and is potentially entitled to an additional $15 million in contingent incentive fees.

Iorio Altamirano LLP is investigating claims on behalf of David Lerner Associates’ customers that purchased Energy 11. To read more about the investigation, please click on the following link: Energy 11, L.P. and Energy Resources 12 L.P.: How to Recover Investment Losses from David Lerner Associates, Inc.

David Lerner Associates has also received several customer complaints related to brokers’ recommendations to purchase the Spirit of America Energy Fund (SOAEX). To read more about the Spirit of America Energy Fund, please click on the following link: Spirit of America Energy Fund (SOAEX): How to Recover Investment Losses From David Lerner Associates, Inc.

Earlier this year, the Financial Industry Regulatory Authority (“FINRA”) suspended former David Lerner Associates financial advisor Charles Bonilla from the securities industry for five months for recommendations of what is believed to be SOAEX and Energy 11. FINRA concluded that Mr. Bonilla lacked a reasonable basis to recommend these products because he did not perform reasonable diligence before making the recommendations and failed to understand their fundamental features and risks. To read more about the suspension of Charles Bonilla and FINRA’s allegations, click on the following link: Former David Lerner Associates Financial Advisor, Charles Bonilla, Suspended by FINRA for Unsuitable Energy-Sector Securities – Boca Raton, FL

If a broker at David Lerner Associates recommended Energy 11 to you and you have suffered investment losses, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential consultation. Customers may be entitled to compensation without paying any out-of-pocket fees or costs through a contingency fee arrangement with securities arbitration law firm Iorio Altamirano LLP.

Martin Lerner has been the subject of six customer complaints, which include one pending dispute and five resolved disputes that ended with monetary compensation being paid to a customer. The pending dispute is a securities arbitration claim filed by a customer against Martin Lerner and David Lerner Associates concerning energy-sector securities. The customer alleged that the recommendations to invest in Energy 12 L.P., an illiquid, non-traded limited partners, and Spirit of America Energy Fund (SOAEX), an energy mutual fund, were unsuitable. The customer also alleged that Martin Lerner made material misrepresentations or omissions regarding both energy-sector securities.

If you have invested in Energy 11, Energy 12, SOAEX, or lost money with broker Martin Lerner or David Lerner Associates, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

David Lerner Associates, Inc.

David Lerner Associates, Inc. is an SEC-registered broker-dealer and FINRA member with branch offices in White Plains, NY; Westport, CT, Lawrenceville, NJ; Syosset, NY; and Boca Raton, FL.

Martin Lerner appears to be the only broker located at David Lerner’s branch office in Boca Raton, Florida.

Earlier this year, the Financial Industry Regulatory Authority (“FINRA”) suspended former David Lerner Associates financial advisor, Charles Bonilla, from the securities industry for five months for recommendations of what is believed to be SOAEX and Energy 11. FINRA concluded that Mr. Bonilla lacked a reasonable basis to recommend these products because he did not perform reasonable diligence before making the recommendations and failed to understand their fundamental features and risks. To read more about the suspension of Charles Bonilla and FINRA’s allegations, click on the following link: Former David Lerner Associates Financial Advisor, Charles Bonilla, Suspended by FINRA for Unsuitable Energy-Sector Securities – Boca Raton, FL.

Iorio Altamirano LLP recently filed a securities arbitration claim against David Lerner related to unsuitable recommendations made by President and CEO Martin Walcoe.

Energy Resources 12 L.P. and Spirit of America Energy Fund (SOAEX)

David Lerner Associates, Inc. (“David Lerner Associates”) is facing numerous customer complaints related to its sale of Energy 11, L.P. (“Energy 11”) and Energy Resources 12, L.P. (“Energy 12”). The complaints allege that Energy 11 and Energy 12 were not suitable investments and that David Lerner Associates failed to supervise the sales and marking of the investments. The complaints also include allegations that David Lerner Associates and its financial advisors misrepresented material facts rattling to the risks associated with these illiquid, concentrated, and high-fee products.

Energy 11 and Energy 12 are illiquid, non-traded limited partnerships sold as private placement securities. The limited partnerships invest in the oil, gas, and energy sector, which has been extremely volatile the past several years. Energy 11 and Energy 12 were not suitable for most conservative or retired investors.

Investors have reported that Energy 11 has failed to make any dividend payments since January 2020.

To read more about Energy 11 and Energy 12, click on the following link: Energy 11, L.P. and Energy Resources 12 L.P.: How to Recover Investment Losses from David Lerner Associates, Inc.

Several customers have filed securities arbitration claims against David Lerner Associates Inc. (“David Lerner Associates”) related to brokers’ recommendations to purchase the Spirit of America Energy Fund. The energy mutual fund invests 80% of its assets in energy and energy-related companies. Class A shares of Spirit of America Energy Fund (NASDAQ: SOAEX) have declined from over $91 per share in August 2014 to around $14.50 per share in mid-May 2021. Class C shares of Spirit of America Energy Fund (NASDAQ: SACEX) have declined from over $47 per share in January 2017 to around $13.50 per share in early mid-May 2021.

The Spirit of America Energy Fund primarily invests in energy-related entities such as exploration companies, production companies, transmission companies, and Master Limited Partnerships (MLPs). The fund’s investment objective is to provide investors long-term capital appreciation and current income. The energy fund is not likely suitable for customers with conservative risk tolerances, short-time horizons, or liquidity needs.

To read more about the Spirit of America Energy Fund, click on the following link: Spirit of America Energy Fund (SOAEX): How to Recover Investment Losses From David Lerner Associates, Inc.

Financial Advisor Martin Lerner (CRD No. 1255769)

Martin Lerner has 35 years of experience in the securities industry and has been associated with the following brokerage firms:

• David Lerner Associates, Inc., from 1994 – the present.
• David Lerner Associates, Inc., from 1980 – 1988.
• First Investors Corporation, from 1979 – 1980.

At David Lerner Associates, Martin Lerner has been the subject of six customer complaints:

• Customer Dispute (October 2020): A customer alleged $100,000 in damages resulting from unsuitable investment recommendations concerning Energy 12 L.P. and Spirit of America Energy Fund (SOAEX). The customer also alleged that Martin Lerner made material misrepresentations or omissions regarding both energy-sector securities. The dispute is pending.
• Customer Dispute (July 2013): A customer filed a securities arbitration complaint alleging $160,424 in damages related to a real estate security. The matter was settled by the firm for monetary compensation.
• Customer Dispute (June 2013): A customer filed a securities arbitration complaint alleging $92,181 in damages related to a real estate security. The matter was settled by the firm for monetary compensation.
• Customer Dispute (May 2013): A customer filed a securities arbitration complaint alleging $431,622 in damages related to APPLE REIT investments. The matter was settled by the firm for monetary compensation.
• Customer Dispute (May 2010): A customer filed a lawsuit in Nassau County, New York, alleging fraud, forgery, misrepresentation, and breach of contract connected with a 2001 replacement of an insurance policy. The matter was settled by the firm for monetary compensation.

Martin Lerner claims that he was named in the 2013 disputes solely because his name “appears on Form BD.”

In 2006, Martin Lerner and FINRA entered into an Acceptance, Wavier & Consent agreement that resulted in a fine and 20-day suspension. The sanctions arose after FINRA alleged that Margin Lerner was functioning as a principal of the firm without being properly registered in that capacity. FINRA also alleged that Martin Lerner failed to comply with New York State Insurance Department Regulation No. 60 and failed to supervise the firm’s employees with a view towards preventing violations of the regulation. The regulation is related to the sale of life insurance and variable annuities.

David Lerner Associates, Inc. – Supervisory Duties

Brokerage firms like David Lerner must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise its financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

If you or a loved one were a customer of Martin Lerner or David Lerner Associates and either sustained financial losses or suspect that the firm did not have your best interest in mind when recommending investments or account transactions, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

Can I Sue My Financial Advisor Over Losses?

Yes, you can sue your financial advisor or broker to recover investment losses if the broker did not have your best interest in mind when they made an investment recommendation or offered investment advice. You can also sue your financial advisor or broker if the financial advisor misrepresented or omitted material facts that an investor should have known about the security or investment strategy.

However, the dispute likely will not be litigated in a court of law. Instead, it will be contested in arbitration.

What is Securities Arbitration?

When an investor suffers investment losses due to misconduct by a financial advisor or broker-dealer, the investor can file a securities arbitration claim against their financial advisor and/or broker-dealer in an effort to be compensated. Arbitration, an alternative dispute resolution process, is the primary forum for resolving disputes between investors and brokerage firms because the client agreement, which the customer signs at account opening, contains a mandatory arbitration clause. To read more about securities arbitration, click here.

Securities arbitration is a unique and complex practice area. Investors should seek out experienced counsel who understands the FINRA forum and can navigate the arbitration process to effectively advocate on their behalf.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue individual FINRA arbitration claims nationwide on behalf of investors to recover financial losses from brokerage firms’ wrongful conduct.

Can You Sue Someone for a Bad Investment?

The short answer is “yes” if your advisor did not act in your best interest connected with an investment-related recommendation.

When a broker-dealer makes an investment recommendation, or a registered investment adviser provides investment advice, the investor is entitled to a recommendation (from a broker-dealer) or advice (from an investment adviser) that is in the best interest of the investor, and that does not place the interest of the financial professional or financial institution ahead of the interests of the retail investors.

The “best interest” standard is not limited to “recommendations” to purchase a security. It also applies to recommendations to sell or hold a security. Additionally, it applies to recommendations to purchase, sell, or hold an investment strategy. Finally, the “best interest” standard also explicitly applies to recommendations of types of accounts, including brokerage accounts and investment advisory accounts.

What is Excessive Trading or Churning?

Excessive trading occurs when a financial advisor makes many trades in a customer’s account, not to benefit the customer, but to generate commissions for the broker.

Churning is a more egregious variation of excessive trading. Churning refers to a situation where the broker executed an excessive number of trades and did so with the intent to defraud or reckless disregard for the customer’s interest. Churning is an unethical and illegal practice. It is also a violation of securities rules and regulations and can cause enormous harm to customers.

Excessive trading and churning are unethical and illegal practices. They are also violations of securities rules and regulations and can cause enormous harm to customers.

How Do I Sue an Investment Firm?

Brokerage firms must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise its financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

If you believe you have a claim, you should contact experienced securities arbitration attorneys at Iorio Altamirano LLP for a free and confidential consultation and review of your legal rights.

How Much Do Securities Arbitration Attorneys Charge?

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue individual FINRA arbitration claims nationwide on behalf of investors to recover financial losses from brokerage firms’ wrongful conduct.

Iorio Altamirano LLP generally represents investors through a contingency fee arrangement, which means that if we do not obtain a recovery, we do not collect a fee*.

*We do not collect a fee unless we obtain a recovery via settlement or judgment. You may, however, be responsible for costs and expenses the firm has advanced according to the terms of your agreement with the firm. The firm may recover advanced costs and expenses by deducting the expense from the gross recovery of any settlement or judgment.

The alleged conduct occurred while Morgan Stanley employed Mr. Maniatis in Dallas, Texas. Morgan Stanley discharged Mr. Maniatis in May 2019, alleging misconduct related to a non-discretionary account and diverting of revenue from “assigned rep code.”

If you have suffered financial losses investing with Constantinos Maniatis, or suspect that Mr. Maniatis did not have your best interest in mind when recommending investments or making account transactions, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your brokerage account.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as Morgan Stanley.

FINRA Letter of Acceptance, Waiver, and Consent No. 2019062788601

FINRA and Mr. Maniatis entered into a Letter of Acceptance, Waiver, and Consent No. 2019062788601on April 26, 2021, after FINRA alleged that between May 4, 2018, and February 27, 2019, while associated with Morgan Stanley, Mr. Maniatis exercised discretion in seven customer accounts despite the fact that Morgan Stanley no longer permitted such discretionary trading. Several of the transactions at issue involved municipal securities. Specifically, FINRA alleged:

• During the relevant time period, between May 4, 2018, and February 27, 2019, Maniatis exercised discretion in seven customer accounts on 105 occasions.
• Thirteen of the transactions involved municipal securities.
• Although Morgan Stanley and the customers had previously authorized the exercise of discretion in the customer accounts at issue, at the time of the transactions at issue, Morgan Stanley did not permit the exercise of discretion in the accounts and no longer accepted the accounts as discretionary accounts.
• Accordingly, Mr. Maniatis violated NASD Rule 2510(b), FINRA Rule 2010, and MSRB Rule G-17

Unauthorized trading often occurs in non-discretionary accounts, where a customer retains discretion. In non-discretionary accounts, brokers must obtain a customer’s permission every time before placing a trade.

Unauthorized trading is an unethical and illegal practice. It is also a violation of securities rules and regulations and can cause enormous harm to customers.

Financial Advisor Constantinos George Maniatis (CRD No. 4253356)

Constantinos Maniatis has 17 years of experience in the securities industry and has been associated with the following firms:

• Morgan Stanley in Dallas, Texas, from June 2009 to May 2019.
• Citigroup Global Markets Inc. in Dallas, Texas, from October 2006 to June 2009.
• Merrill Lynch, Pierce, Fenner & Smith Incorporated in New York, New York, from January 2001 to November 2005.

Mr. Maniatis is currently not registered with any firm.

According to his public disclosure report with FINRA, Mr. Maniatis has been the subject of at least one customer disputes:

• Customer Dispute (December 2014): A customer filed a written complaint to Morgan Stanley alleging that Mr. Maniatis made misrepresentations related to an investment strategy that involved energy positions. The customer did not file a securities arbitration complaint, instead choosing to complain directly to the brokerage firm. The firm denied the customer any compensation.

Morgan Stanley – A Duty to Supervise

Financial institutions like Morgan Stanley must properly supervise financial advisors and customer accounts. Brokerage firms must establish and maintain a reasonably designed system to oversee account activity, such as unauthorized trading, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

If you have suffered investment losses with Constantinos Maniatis or Morgan Stanley, or suspect other inappropriate activity occurred in your investment or retirement account, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential review of your legal rights.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

FINRA suspended Mr. Bonilla for recommending energy-sector securities to customers without having a reasonable basis to believe those investments were suitable. Mr. Bonilla was a broker with David Lerner Associates, Inc. in Boca Raton, FL when the alleged conduct occurred.

If you have suffered financial losses investing with Mr. Bonilla or suspect that Mr. Bonilla did not have your best interest in mind when recommending investments, including energy-sector mutual funds or limited partnerships, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your account.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as David Lerner Associates, Inc.

FINRA Letter of Acceptance, Waiver, and Consent No. 2020067626001

Charles Bonilla and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on February 8, 2021, over his conduct from December 2015 to December 2017, while employed by David Lerner Associates, Inc. (“David Lerner Associates”). FINRA alleged that Mr. Bonilla recommended that his customers invest in energy-sector securities without having a reasonable basis to believe those investments were suitable. FINRA concluded that Mr. Bonilla did not understand the potential risks and costs of the recommended investments because he failed to conduct reasonable diligence of the securities.

Mr. Bonilla Lacked a Reasonable Basis to Recommend a Proprietary Mutual Fund

According to FINRA, in December 2015 and December 2017, Mr. Bonilla recommended investments in a mutual fund created for customers of David Lerner Associates. During that period, the fund’s investment objective was to provide shareholders long-term capital appreciation and current income. According to the fund’s prospectus, the fund sought to achieve its investment objective by investing at least 80% of its net assets in a combination of securities and other assets of energy and energy-related companies. The fund sought to make monthly distributions to shareholders, which the prospectus states were expected to be a return of capital distributions. The fund’s holdings are concentrated in energy-related securities, and the fund’s performance is largely dependent on the condition of the energy industry.

FINRA specifically alleged:

• Bonilla did not perform reasonable diligence on the fund prior to recommending it to customers.
• Bonilla could describe little about the fund’s underlying holdings, beyond that some of the holdings were “midstream” energy companies.
• Bonilla did not know how the fund paid its monthly distributions. Further, Mr. Bonilla did not know what, if any, diligence David Lerner Associates performed on the fund or its holdings prior to offering shares of the funds to customers.
• Without sufficient understanding of these fundamental features or risks of the fund, Mr. Bonilla recommended that three of his customers collectively invest over $250,000 in the fund.
• Bonilla received $4,355.72 in commissions from these transactions.
• During the period between the fund’s initial offering in July 2014 and December 2015, the fund’s net asset value declined by more than 40%.

Mr. Bonilla Lacked a Reasonable Basis to Recommend a Limited Partnership

According to FINRA, between December 2015 and January 2017, Mr. Bonilla also recommended illiquid investments in a limited partnership sold to customers of David Lerner Associates. This is how FINRA described the limited partnership investment at issue:

Limited partner [investors] invested in the partnership by purchasing common unit ownership interests in the partnership. The limited partnership was formed to acquire and develop oil and gas properties located onshore in the United States. The partnership was a “blind pool,” meaning [that] at the time of the initial offering, the partnership had not identified any properties for acquisition. According to the prospectus, the partnership’s primary objectives included making distributions to limited partners, which could be sourced from operations, offering proceeds, borrowings, and/or return of capital. Additionally, five to seven years after the termination of the offering, the partnership intended to engage in a liquidity transaction in which the partnership would sell its properties and distribute the net sales proceeds to the partners, merge with another entity or list its common units on a national securities exchange. The partnership’s ability to make [a] return of capital distributions to limited partners and engage in a profitable liquidity event was substantially dependent on the performance of the properties in which the partnership invested.

Regarding Mr. Bonilla’s conduct, FINRA specifically alleged:

• Bonilla did not perform reasonable diligence on the partnership prior to recommending the common units to customers.
• Bonilla did not know how the partnership generated funds to pay investors monthly distributions.
• Bonilla did not know how the price of the common units reflected on customer account statements were calculated.
• Bonilla did not read the full prospectus, nor did he review the partnership’s financial statements.
• Without a sufficient understanding of the fundamental features and risks of the partnership, Mr. Bonilla recommended that two of his customers collectively invest over $650,000 in the partnership,
• Bonilla received $18,061.31 in commissions from the transactions.
• In March 2020, the partnership notified its common unit holders that it was suspending distributions until further notice.
• At the time, the customer was 28 years old, in the 15 percent tax bracket, and starting her own business.

Financial Advisor Charles Bonilla (CRD No. 2572107)

Mr. Bonilla has 21 years of experience in the securities industry and has been employed by eight different firms. Since 2008, he has been associated with the following firms:

• Pruco Securities, LLC in Boca Raton, FL, from May 2018 – February 2019.
• David Lerner Associates, Inc. in Boca Raton, FL, from December 2015 – May 2018.
• Scottrade, Inc. in Aventura, FL, from January 2008 – December 2014.

Scottrade, Inc. fired Mr. Bonilla in December 2014, alleging that he engaged in a business activity without receiving proper approval from the firm.

Charles Bonilla also goes by the following names: Charles A. Bonilla, Charles Abad Santos Bonilla, and Charles Abadsantos Bonilla.

David Lerner Associates, Inc.: A Duty to Supervise

Financial institutions, like David Lerner Associates, must properly supervise financial advisors and customer accounts. Brokerage firms are required to establish and maintain a reasonably designed system to oversee account activity, such as transactions in energy-sector securities, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise its financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

How to Recover Losses or Obtain a Free Consultation

If you have suffered financial losses investing with Charles Bonilla or suspect that Mr. Bonilla did not have your best interest in mind when recommending investments, such as energy-sector mutual funds and limited partnerships, contact New York securities arbitration lawyer August Iorio of Iorio Altamirano LLP at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.