Massachusetts Orders $10.75 Million in Additional Restitution for Sales of Non-traded REIT

by InvestorLawyers on October 29, 2013

in Arbitration,FINRA,Massachusetts,Securities Fraud,Suitability

 

Investment fraud lawyers continue to investigate claims on behalf of investors who suffered significant losses as a result of an unsuitable recommendation of non-traded REITs, or real estate investment trusts. Last month, securities regulators of Massachusetts ordered five independent broker-dealers (IBDs) to pay an additional $10.75 million in restitution over sales of non-traded REITs. The relevant sales occurred beginning in 2005.

The five firms involved in this order are Ameriprise Financial Services Inc., Commonwealth Financial Network, Securities America Inc., Royal Alliance Associates Inc. and Lincoln Financial Advisors Corp. This order follows one made in May, in which the five IBDs agreed to pay $975,000 in fines and restitution of $6.1 million. Prior to that decision, LPL Financial agreed to pay restitution of $4.8 million to Massachusetts clients.

Of the $10.75 million, Securities America must pay $7.5 million, Ameriprise Financial must pay $1.6 million, Lincoln Financial must pay $841,000, Commonwealth must pay $534,000 and Royal Alliance must pay $125,000. This order, combined with the previous orders, requires restitution of $21.6 million to Massachusetts clients over improper sales of non-traded REITs.  Non-Massachusetts investors will not benefit from this restitution.  However, securities arbitration lawyers say that investors in other states can still recover losses sustained in risky non-traded REITs sold by these firms in securities arbitration.

According to investment fraud lawyers, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. Non-traded REITs are inherently risky and illiquid, which limits access of funds to investors and makes them unsuitable for many individuals with conservative risk tolerances and those who need easy access to funds.

If you suffered significant losses because of the unsuitable recommendation of non-traded REITs, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a no-cost, confidential consultation.

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