The allegations read: Patatian was named a respondent in a finra complaint alleging that he made recommendations to customers to purchase non-traded real estate investment trusts (reits) that were unsuitable because he lacked a reasonable basis to recommend the product to any investor. The complaint alleges that patatian did not understand the basic features and risks associated with the non-traded reits and failed to conduct reasonable diligence to understand the product. Some of patatian's customers also had liquidity concerns and thus his recommendation to purchase an illiquid non-traded reit was further unsuitable due to each customer's specific situation and needs. The complaint also alleges that patatian caused customers to incur taxes and surrender fees by recommended that the customers surrender existing variable annuity policies when he failed to understand the adverse financial consequences of the surrenders. The complaint further alleges that patatian recommended variable annuity exchanges that were unsuitable because he failed to understand the consequences of those exchanges, including the increased cost of the new variable annuities and the fact that a return of premium death benefit was not a standard feature of all variable annuities. In addition, the complaint alleges that without a customer's knowledge or consent, patatian impersonated the customer in a telephone call with an insurance company to obtain the contract value and surrender fee for the variable annuity. Moreover, the complaint alleges that patatian recorded inaccurate customer information on his member firm's customer account and disclosure forms, including by overstating customers' net worth and exaggerating customers' years of investment experience. Notably, the state of the california and the reit issuers limited the total purchase of a reit to 10 percent of the customer's net worth. In some instances, patatian inflated the customer's net worth on the firm's reit paperwork in order to evade the limits.
