Previously barred by FINRA for unsuitably selling American Realty Capital-sponsored non-traded real estate investment trusts (REITs) to retirees all while ARC's CFO Brian Block was under investigation (and convicted) for REIT-related securities fraud, former Western International Securities broker Patatian lost an appeal seeking to overturn his ouster.
Megurditch "Mike" Patatian (CRD #4047060) during testimony tried to excuse his role in recommending nearly $8 million-worth of unsuitable REITs to his customers by claiming ignorance: "I was too stupid to really understand what it was really all about."
Meanwhile, the unsuitable recommendations and sales netted Patatian $450,000 in commissions and fees at the expense of his customers, one third of whom were senior citizens when they bought their REITs. In all, he made 81 recommendations to purchase REITs to 59 of his customer reported Patrick Donachie of WealthManagement.com.
For instance, the regulator rejected Patatian's "I was too stupid" line of reasoning, affirming the previous finding that Patatian created inaccurate forms to facilitate unsuitable REIT sales and that Patatian appeared to misrepresent several key pieces of information as part of the sales process.
Many of Patatian's customers were former Los Angeles Department of Water and Power employees and FINRA found that Patatian inflated his customers' experience levels in order to qualify them to purchase the risky REITs by falsely conflating their service time at DWP with investment experience such that Patatian would improperly attest that an employee who worked at DWP for 30 years had 30 years of investing experience, even though the actions of DWP employment and investing experience had little if anything to do with each other.
In another transaction, Patatian purportedly overstated a customer's income and net worth by several millions of dollars.
FINRA initially barred former CUSO and Western International Securities broker Megurditch Mike Patatian in 2022. American Realty Capital Properties ex-CFO Brian Block's REIT securities fraud conviction occurred in 2017, with ARCP Chair Nicholas Schorsch's so-called REIT Empire implicated in a massive fraudulent scheme, with scores of FINRA member firms still selling the American Realty Capital Properties, RCS Capital, or Cole Real Estate REIT-related products even after ARCP's financial problems became public.
If you invested with Western International Securities or its ex-broker Megurditch Patatian in an American Realty Capital-sponsored REIT, or with any investment adviser whose unsuitable recommendations to purchase a REIT or other complex and excessively risky product has proven harmful to your investments or interests, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.