The Ottumwa Courier

August 15, 2013

Lawsuit over failed investment names Marion firm

DAVID PITT
Associated Press

---- — DES MOINES, Iowa (AP) — An Iowa-based investment broker has been named in a federal lawsuit filed by an investor who lost money in a failed real estate investment deal.

The lawsuit, filed in U.S. District Court in Cedar Rapids, seeks class-action status, recovery of losses, and other damages from Berthel Fisher & Company Financial Services of Marion. The firm promoted securities sold by Thompson National Properties, a California real estate investment company.

Jon Hanson, a Colorado retiree who invested $75,000, filed the lawsuit last month on behalf of about 200 other investors who committed about $26 million.

The lawsuit alleges Berthel Fisher promoted the investment beginning in 2008 and "had a duty to conduct an independent, thorough, and reasonable investigation of the scheme and the offering to ensure that they did not violate the applicable securities rules and regulations."

It also alleges negligent misrepresentation, aiding and abetting fraud, and violation of securities laws.

Court documents say Berthel Fisher failed to disclose to investors that their money would be commingled with other investors' funds to pay investors in other funds in a "Ponzi-scheme fashion."

"This is a case brought by one individual investor who is not a Berthel Fisher customer, and who seeks to bring the case on behalf of a class," said Vincent Louwagie, a lawyer who is representing the broker. "The investment at issue is still in operation. Berthel Fisher denies liability, looks forward to defending itself in this case and is confident in its position."

Over several years, a series of investments organized by TNP lost money and last year the investment Hanson and others put money into defaulted.

TNP Chief Executive Officer Tony Thompson is the subject of a complaint filed by the securities industry's regulator, the Financial Industry Regulatory Authority.

It alleges in a complaint filed July 30 that Thompson, who lives and operates his business in California, raised $250 million from retail investors in less than four years through a number of real estate investment vehicles beginning in 2008. About $50 million was high yield promissory notes that guaranteed interest and principal.

Many of the TNP securities suffered massive losses and when FINRA launched an investigation it alleges TNP failed to respond in a timely manner.

The complaint alleges misrepresentations or omissions to investors about the guarantee of principal and interest and in the use of proceeds, failure to supervise offerings of private placement securities, and failure to respond to the investigation.

FINRA seeks sanctions including fines against Thompson.

Messages left with TNP were not immediately returned.