According to FINRA, Martin Allan Barth has been suspended from association with any FINRA member in all capacities for 16 months for making material misrepresentations and omissions in connection with private placement offerings and for fraudulently obtaining Pandemic Unemployment Assistance.

Barth marketed two private placement offerings designed to raise capital for a real estate investment trust (REIT). The offering documents disclosed that selling representatives would receive a five percent sales commission and the firm would receive a three percent dealer-manager fee. However, Barth was entitled to receive additional undisclosed compensation from an affiliate of the REIT's management company.

Barth failed to disclose that the REIT's management company had been unsuccessfully pursuing a public listing for several years and was experiencing negative cashflow. Based on his recommendations, 21 investors invested approximately $1.6 million, including $55,000 from two of his own customers.

Additionally, Barth submitted 70 Pandemic Unemployment Assistance certifications falsely claiming he did not work and did not receive compensation exceeding $504 weekly. In fact, he earned approximately $50,000 during this period, including over $23,000 in undisclosed compensation from the REIT affiliate. He fraudulently obtained approximately $37,000 in benefits.

This case demonstrates the importance of disclosure in securities offerings. When representatives receive undisclosed compensation, it creates a conflict of interest that investors cannot evaluate. The failure to disclose material negative information about the REIT prevented investors from making informed decisions.

Investors in private placements should carefully review all disclosures and specifically ask about all compensation the representative will receive in connection with the investment.