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REIT (Real Estate Investment Trust) Archives

Massachusetts Hits Securities America, Inc. With $7.6 Million Restitution Order for Non-traded REIT Sales

Massachusetts securities regulators have hit Securities America, Inc. with $7.6 million in restitution to clients as well as fines over sales of non-traded real estate investment trusts (REITs). The restitution and fines stem from non-traded REITs sales from 2005 to present. Massachusetts' investigation showed problems related to the firm's own policies as well as the state rule that an investor's purchase of REITs cannot be more than 10% of an investor's liquid net worth. This particular matter involved 126 transactions over an eight-year period. An excessive concentration of REITs can be a violation of FINRA's suitability rule. After the investigation of broker-dealer sales practices involving REITs, the Massachusetts Securities Division launched a broader inquiry into the sales of alternative investments to seniors.

Massachusetts Hits Commonwealth Financial Network with $534,000 Restitution Order for Non-traded REIT Sales

Massachusetts securities regulators have hit Commonwealth Financial Network with $534,000 in restitution to clients as well as fines over sales of non-traded real estate investment trusts (REITs). The restitution and fines stem from non-traded REITs sales from 2005 to present. Massachusetts' investigation showed problems related to the firm's own policies as well as the state rule that an investor's purchase of REITs cannot be more than 10% of an investor's liquid net worth. After the investigation of broker-dealer sales practices involving REITs, the Massachusetts Securities Division launched a broader inquiry into the sales of alternative investments to seniors.

Massachusetts Hits Lincoln Financial Advisors Corp. With $841,000 Restitution Order for Non-traded REIT Sales

Massachusetts securities regulators have hit Lincoln Financial Advisors Corp. with $841,000 in restitution to clients as well as fines over sales of non-traded real estate investment trusts (REITs). The restitution and fines stem from non-traded REITs sales from 2005 to present. Massachusetts' investigation showed problems related to the firm's own policies as well as the state rule that an investor's purchase of REITs cannot be more than 10% of an investor's liquid net worth. Lincoln Financial Advisors Corp. spokesman Michael Arcaro said: "We cooperated fully with the examination conducted by the Massachusetts Securities Division, and we are pleased to put this matter behind us." An excessive concentration of REITs can be a violation of FINRA's suitability rule. After the investigation of broker-dealer sales practices involving REITs, the Massachusetts Securities Division launched a broader inquiry into the sales of alternative investments to seniors.

Massachusetts Hits Ameriprise Financial Services, Inc. With $1.6 Million Restitution Order for Non-traded REIT Sales

Massachusetts securities regulators have hit Ameriprise Financial Services, Inc. with $1.6 million in restitution to clients as well as fines over sales of non-traded real estate investment trusts (REITs). The restitution and fines stem from non-traded REITs sales from 2005 to present. Massachusetts' investigation showed problems related to the firm's own policies as well as the state rule that an investor's purchase of REITs cannot be more than 10% of an investor's liquid net worth. Chris Reese, a spokesman for Ameriprise Financial Services, Inc., declined to comment. An excessive concentration of REITs can be a violation of FINRA's suitability rule. After the investigation of broker-dealer sales practices involving REITs, the Massachusetts Securities Division launched a broader inquiry into the sales of alternative investments to seniors.

Massachusetts Hits Royal Alliance Associates Inc. with $125,000 Restitution Order for Non-traded REIT Sales

Massachusetts securities regulators have hit Royal Alliance Associates Inc. with $125,000 in restitution to clients as well as fines over sales of non-traded real estate investment trusts (REITs). The restitution and fines stem from non-traded REITs sales from 2005 to present. Massachusetts' investigation showed problems related to the firm's own policies as well as the state rule that an investor's purchase of REITs cannot be more than 10% of an investor's liquid net worth. An excessive concentration of REITs can be a violation of FINRA's suitability rule. After the investigation of broker-dealer sales practices involving REITs, the Massachusetts Securities Division launched a broader inquiry into the sales of alternative investments to seniors.

VSR Financial Services, Inc. and Donald Joseph Beary Sanctioned for Faulty Supervisory System Governing Non-Conventional Investments

Overland Park, Kansas based VSR Financial Services, Inc. and Donald Joseph Beary, a registered representative at VSR Financial Services, submitted a Letter of Acceptance, Waiver and Consent in which the firm and Mr. Beary consented to, but did not admit to or deny, the described sanctions and to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that the firm failed to establish, maintain and enforce a reasonable supervisory system regarding the sale of non-conventional investments. The findings stated that the firm's written supervisory procedures (WSPs) provided that no more than 40 percent to 50 percent of a client's exclusive net worth could be invested cumulatively in alternative investments unless there was a substantial reason to exceed the guidelines and that justification was well documented. Supplemental to these procedures, the firm, through Mr. Beary, created additional procedures that applied a discount to certain non-conventional instruments, reducing the percentage of a customer's liquid net worth invested. The findings also stated that as the Direct Participation Principal, Mr. Beary had responsibility for the implementation and supervision of the discount program. In a letter to the firm, the Securities and Exchange Commission (SEC) identified that the firm it did not have adequate written procedures relating to the discount program. The SEC made the same finding two years later. Despite these warnings from the SEC, Mr. Beary did not take reasonable steps to implement WSPs or to otherwise discontinue the use of the discount program.

WFG Investments Subpoenaed by Massachusetts Regulators over Sales of Alternative Investments to Seniors

WFG Investments, Inc. was subpoenaed by Massachusetts in connection with a sweep investigation, which is looking into sales practices involving alternative investments sold to seniors. WFG Investments' principal office is located in Dallas, Texas. On July 10, 2013, the state's securities division sent the subpoena to WFG Investments asking for information on sales of the products to state residents who are 65 or over. Some of the non-traditional investments include oil and gas partnerships, private placements, structured products, hedge funds, and tenant-in-common offerings. The state demanded information from WFG Investments on any such products that have been sold over the past year, the investors who purchased them, the commissions generated, how the sales were reviewed, and all relevant compliance, training and marketing materials - WFG Investments has until July 24 to respond. The state added that being on the list of targeted firms does not indicate wrongdoing.

UBS Securities Subpoenaed by Massachusetts Regulators over Sales of Alternative Investments to Seniors

UBS Securities LLC was subpoenaed by Massachusetts in connection with a sweep investigation, which is looking into sales practices involving alternative investments sold to seniors. UBS Securities' principal office is located in New York, New York. On July 10, 2013, the state's securities division sent the subpoena to UBS Securities asking for information on sales of the products to state residents who are 65 or over. Some of the non-traditional investments include oil and gas partnerships, private placements, structured products, hedge funds, and tenant-in-common offerings. The state demanded information from UBS Securities on any such products that have been sold over the past year, the investors who purchased them, the commissions generated, how the sales were reviewed, and all relevant compliance, training and marketing materials - UBS Securities has until July 24 to respond. The state added that being on the list of targeted firms does not indicate wrongdoing.

TD Ameritrade Subpoenaed by Massachusetts Regulators over Sales of Alternative Investments to Seniors

TD Ameritrade Inc. was subpoenaed by Massachusetts in connection with a sweep investigation, which is looking into sales practices involving alternative investments sold to seniors. TD Ameritrade's principal office is located in Omaha, Nebraska. On July 10, 2013, the state's securities division sent the subpoena to TD Ameritrade asking for information on sales of the products to state residents who are 65 or over. Some of the non-traditional investments include oil and gas partnerships, private placements, structured products, hedge funds, and tenant-in-common offerings. The state demanded information from TD Ameritrade on any such products that have been sold over the past year, the investors who purchased them, the commissions generated, how the sales were reviewed, and all relevant compliance, training and marketing materials TD Ameritrade has until July 24 to respond. The state added that being on the list of targeted firms does not indicate wrongdoing.

Signator Investors Inc. Subpoenaed by Massachusetts Regulators over Sales of Alternative Investments to Seniors

Signator Investors Inc. was subpoenaed by Massachusetts in connection with a sweep investigation, which is looking into sales practices involving alternative investments sold to seniors. Signator Investors Inc.'s principal office is located in Boston, Massachusetts. On July 10, 2013, the state's securities division sent the subpoena to Signator Investors Inc. asking for information on sales of the products to state residents who are 65 or over. Some of the non-traditional investments include oil and gas partnerships, private placements, structured products, hedge funds, and tenant-in-common offerings. The state demanded information from Signator Investors Inc. on any such products that have been sold over the past year, the investors who purchased them, the commissions generated, how the sales were reviewed, and all relevant compliance, training and marketing materials - Signator Investors Inc. has until July 24 to respond. The state added that being on the list of targeted firms does not indicate wrongdoing.

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