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Centaurus Loses FINRA Arbitration Involving REITs, TICs and ICON Leasing Fund

Brokerage firm Centaurus Financial recently lost a FINRA arbitration case involving recommendations by broker Fera Shivaee of Irvine, California. Shivaee allegedly made unsuitable investment recommendations in the following investments:

* NNN Wesley Paces Tenant in Common


* ICON Leasing

* Apartment Trust of America

* Behringer Harvard

* Hines REIT

* Cornerstone

* Redwood Mortgage

All of these investments all into the category of “non-conventional investments” that carry significant risks and that may not be suitable for ordinary invetors. In this case, finding the recommendatiosn were unsuitable, the FINRA arbitration panel awarded the customer over $400,000 in damages as well as recession of the REIT investments.

15.6.11 money maze

TIC investments like NNN Welsey Paces are extremely speculative and risky investments and should only be offered to investors who are experienced or have a high risk tolerance. Unfortunately, these investments are often presented by brokers as being safe and low risk. These products were often represented as “guaranteed” and/or “safe” investments that would return between 7 and 12 percent each year. However, in many cases, investors were not properly advised on the risks associated with TIC investments.

Like TICs and leasing funds, non-traded real estate investment trusts (REITs) such as Behringer Harvard (now known as TIER REIT), KBS REIT and Hines REIT are highly risky products that pose a significant risk that the investor will lose some or all of his initial investment. Non-traded REITs are not listed on a national securities exchange, limiting investors’ ability to sell them after the initial purchase. Such illiquid and risky investments are often better suited for sophisticated and institutional investors, rather than retail investors such as retirees who do not wish to have their money tied up for years, or risk losing a significant portion of their investment.

Brokers and financial advisors are required to make investment recommendations that are consistent with their clients’ risk tolerance, net worth, investment objectives and experience in the market. However, due to the high sales commissions brokers typically earn for selling REITs, TICs and leasing funds – as high as 15%- brokers can be tempted to make “one size fits all” recommendations to investors in order to reap commissions. Brokerage firms are required by FINRA rules to supervise brokers and investment advisors- even those who work in independent branch offices- to ensure that the brokers make only suitable recommendations.

If you suffered significant losses as a result of your investment in a TIC, REIT or leasing fund and were not properly advised of the risks associated with the investment, you may be able to recover your losses in securities arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or for a no-cost, confidential consultation.

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