LPL to Pay Up to $2.5 Million to Settle Claims; Customers Continue to Explore Options

by InvestorLawyers on February 14, 2013

in Arbitration,FINRA,LPL Financial,REIT,Securities Fraud,Suitability

On February 6, 2013, securities fraud attorneys announced that LPL Financial has settled claims brought by the State of Massachusetts by agreeing to pay up to $2.5 million. The claims against LPL alleged that it failed to supervise registered representatives related to the sales of non-traded REITs, or real estate investment trusts.

LPL to Pay Up to $2.5 Million to Settle Claims, LPL Customers Continue to Explore Options

The following non-traded REITs were the focus of this complaint: Dividend Capital Total Realty, Inland American, Wells REIT II, Cole Credit Property Trust II, Cole Credit Property Trust III, Cole Credit Property 1031 Exchange and W.P. Carey Corporate Property Associates 17. Investment fraud lawyers encourage investors who suffered significant losses as a result of their investment in these non-traded REITs to explore all of their legal rights and options.

LPL was charged in December 2012 with unethical and dishonest business practices related to the sale of REITs. These charges are in connection with the sales of $28 million in non-traded REITs between 2006 and 2009, which were sold to nearly 600 clients. According to the Securities Division, 569 of those transactions had regulatory violations. According to Massachusetts’ findings, LPL’s REIT sales included violations of the State’s 10 percent concentration limits, prospectus requirements and LPL compliance practices. Furthermore, Massachusetts alleged that representatives of LPL received limited REIT training.

As non-traded REITs, these investments may have carried a high commission which may have motivated LPL representatives and brokers with other full-service brokerage firms to make the recommendation to investors despite the investment’s unsuitability. The commission on a non-traded REIT is often as high as 15 percent. Securities fraud attorneys say that if these investments were misrepresented by their brokers as safe, clients may be able to recover losses through securities arbitration.

Though Massachusetts’ claims against LPL have been settled, investors all over the country have suffered losses as a result of the unsuitable recommendation of a non-traded REIT. It is possible that investors from other states may be able to file arbitration claims in connection with alleged misleading sales presentations and/or unsuitable recommendations of non-traded REITs similar to those alleged in the Massachusetts case.   If you suffered non-traded REIT losses with LPL or another full-service brokerage firm, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact an investment fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

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