← Broker database 2025-08-21
William Charles Burks II Suspended for Unsuitable Alternative Investment Recommendations
According to FINRA, William Charles Burks, II was fined $10,000 and suspended for four months for recommending unsuitably high concentrations of alternative investments to three customers.
Burks recommended that the customers invest heavily in non-traded real estate investment trusts (REITs), business development companies (BDCs), and interval funds. These alternative investments are illiquid or have limited liquidity and subject investors to substantial risk of loss.
Each of the three customers had a low or moderate risk tolerance. Two had investment objectives of preserving capital and generating income. However, the transaction paperwork submitted to the firm did not reflect these conservative objectives.
Each customer has filed an arbitration claim, and two have reached settlements.
The suspension was in effect from September 15, 2025, through January 14, 2026.
Alternative investments like non-traded REITs and BDCs have grown in popularity but carry significant risks. These products are typically illiquid, meaning investors may not be able to sell them easily or at all. They often have high fees, complex structures, and may use leverage that amplifies both gains and losses.
For investors with conservative objectives like capital preservation and income generation, high concentrations in illiquid alternative investments are generally inappropriate. Such investments tie up capital that may be needed and expose conservative investors to risks inconsistent with their goals.
Before investing in alternatives, understand the liquidity terms, fee structures, and how the investment fits your overall financial plan. Be wary of recommendations that concentrate significant portions of your portfolio in illiquid products.