Articles Posted in Arizona

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Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of doing business with Surevest Capital Management and employees of the firm.

Alleged Unsuitable Recommendations of Non-Traded REITs by Surevest Others

Allegedly, Surevest invested some of its clients in high-risk portfolios, allocating very little of these accounts into traditionally low-risk investments. These high-risk investments allegedly included equities, non-traded REITs and other private placement securities. Some Surevest clients have raised allegations asserting that the high-risk investment recommendations were unsuitable and implemented regardless of the age, risk tolerance and other considerations of the investors. 

According to securities arbitration 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 as well as those who need easy access to funds. Other private placements and equities also carry significant risks.

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Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of their investment in ArciTerra National REIT. According to ArciTerra National REIT’s Form D filing with the Securities and Exchange Commission, ArciTerra is a real estate investment trust based in Phoenix, Arizona.

Investors of ArciTerra National REIT Could Recover Losses

REIT Investments like the ArciTerra National REIT typically offer commissions between 7-10 percent, which is significantly higher than traditional investments like mutual funds and stocks. In some cases, the commission generated by these investments can be as high as 15 percent. This higher commission can explain why brokerage firms are motivated to recommend these investments despite their possible unsuitability.

Stock fraud lawyers are investigating the possibility that brokerage firms may be held liable for the recommendation of ArciTerra National REIT. Financial Industry Regulatory Authority rules have established that brokers and 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 illiquid and inherently risky and, therefore, not suitable for many investors.

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Investment attorneys turn their eyes to Bank of America once again, only two months into the New Year. Bank of America Corp. has been subpoenaed by William Gavin, the Massachusetts securities regulator, over LCM VII Ltd. and Bryn Mawr CLO II Ltd., two related collateralized loan obligations. These two CLOs led to investor losses totaling $150 million. The subpoena will, hopefully, help authorities in determining if Bank of America knew it was overvaluing the assets of the portfolios. Both Bryn Mawr and LCM were sold in 2007, prior to the 2008 merger between Bank of America Securities and Merrill Lynch.

News: Bank of America Faces More Allegations In 2012

Bank of America held commercial loans from small banks amounting to around $400 million in 2006. In 2007, securities packages were put together from these loans and then sold to investors. The subpoena arrives only one day after Bank of America, JP Morgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. settled allegations of engaging in abusive mortgage practices. These abusive practices included engaging in deceptive practices in the offering of loan modifications, a failure to offer other options before closing on borrowers with federally insured mortgages, submitting improper documents to the bankruptcy court and robo-signing foreclosure documents without proper review of the paperwork.

The settlement amounted to $25 billion and involved federal agencies plus authorities in 49 states. This settlement is designed to give $2,000 to around 750 borrowers whose homes were foreclosed upon after the home values dropped 33 percent from their 2006 worth, and to provide mortgage relief. In addition, all five banks will pay $766.5 million in penalties to the Federal Reserve. This is considered to be the biggest federal-state settlement ever. Bank of America will also pay $1 billion to settle allegations that it, together with its Countrywide Financial unit, engaged in fraudulent and wrongful conduct.

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