Pennsylvania Regulators Investigate Non-traded REIT Sales

by InvestorLawyers on April 16, 2014

in Arbitration,FINRA,Pennsylvania,REIT,Suitability

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses in non-traded real estate investment trusts, or non-traded REITs, in light of an investigation that is now underway by the Pennsylvania Department of Banking and Securities.

Pennsylvania Regulators Investigate Non-traded REIT Sales

Reportedly, Pennsylvania regulators are currently looking into non-traded REIT sales conducted by Securities America employees. Securities America is owned by broker-dealer Ladenburg Thalmann & Co. Inc., which also owns two more independent brokerage firms. Ladenburg stated in its annual report that Pennsylvania regulators wanted to be provided with data regarding non-traded REITs purchased by Pennsylvania residents since 2007.

Securities arbitration lawyers are currently unsure if the non-traded REIT sales investigation will extend to firms other than Securities America.

Last year, multiple independent brokerage firms, including Securities America, paid to settle charges regarding non-traded REIT sales with the Massachusetts Securities Division. Securities America’s piece of that pie included a $150,000 fine and restitution to clients totaling $8.4 million. The Massachusetts probe found that several firms had trouble abiding state rules, as well as their own policies, regarding non-traded REIT sales.

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 are a Securities America customer, or customer of another full-service brokerage firm, who 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 or newcases@investorlawyers.net for a no-cost, confidential consultation.

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