William Galvin, the secretary of the Commonwealth of Massachusetts, today announced settlements with five leading independent broker/dealers to make $8.6 million in restitution to investors and pay fines totaling $975,000 for the sales of nontraded real estate investment trusts (REITs).

These five firms are: Ameriprise Financial Services Inc., with $2.6 million in restitution and a fine of $400,000; Commonwealth Financial Network, which will pay $2.1 million in restitution and a $300,000 fine; Royal Alliance Associates Inc., which will pay $59,000 in restitution and a $25,000; Securities America Inc., paying $778,000 in restitution and a $150,000 fine; and Lincoln Financial Advisors Corp., paying $504,000 in restitution and a $100,000 fine.

“Our investigation into the sales of REITs, triggered by investor complaints, showed a pattern of impropriety on the sales of these popular but risky investments on the part of independent brokerage firms where supervision has historically been difficult to monitor,” Mr. Galvin said in a statement.

This is the Massachusetts Securities Division’s second settlement this year over the sale of nontraded REITs. In February, Mr. Galvin reached a settlement with LPL Financial LLC to pay at least $2 million in restitution and $500,000 in fines over the sale of nontraded REITs.

Mr. Galvin has garnered more than $11 million total this year, in restitution for Massachusetts investors and levied $1.4 million in fines from independent broker-dealers, many that sell nontraded REITS.

Soreide Law Group, PLLC, represents clients nationwide before FINRA. Call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552.

Ameriprise Financial services Inc · Commonwealth Financial Network · Lincoln Financial Advisors Corp · Massachusetts fines over nontraded REITs · non-traded real estate investment trusts · Nontraded REITs · REIT · risky REITs · Royal Alliance Associates Inc · Securities America Inc.

FINRA, the Financial Industry Regulatory Authority Inc., is alerting broker-dealers to a number of shortcomings in how they communicate with investors about non-traded real estate investment trusts (REITs).

According to FINRA, broker-dealers are falling short in a some areas, including distributing materials that contain misleading and inaccurate statements about the potentials of investing in illiquid real estate programs.

“Recent reviews by FINRA of communications with the public regarding real estate programs have revealed deficiencies,” FINRA said. These broker-dealer communications “have emphasized the distributions paid by a real estate program and failed to adequately explain that some of the distribution constitutes return of principal,” the FINRA notice said.

FINRA’s notice to members is the latest effort to improve the sales practices around and increase transparency of illiquid REITs, which are sold almost exclusively through independent broker-dealers such as LPL Financial LLC, and Ameriprise Financial Services Inc.

Some broker-dealers may be downplaying the risks associated with such REITs. “In addition, some communications have not provided sufficient discussions of the risks associated with investing in the products in order to balance the presentation of benefits.”

Disclosure should be more accurate and explain how the REITs operate, FINRA said. Descriptions of the REITs in communications to clients also should be consistent with the REIT’s prospectus.

“In order to be fair and balanced, firm communications concerning a real estate program may not include an annualized distribution rate until the program has paid distributions that are, on an annualized basis, at a minimum equal to that rate for at least two consecutive full quarterly periods,” the FINRA notice said.

If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations regarding non-traded REITs, private placements, or other illiquid, complex products, call for a free consultation on how to potentially recover your losses. To speak with an attorney call Soreide Law Group at 888-760-6552.

Ameriprise Financial Inc · FINRA alerting brokers on REIT sales · highly illiquid investments · investing in illiquid REITs · LPL Financial LLC · non-traded real estate investment trusts · Non-traded REIT loss lawyer · REIT · REIT distribution · risks with REITs

In an article in the Wall Street Journal, Feb. 11, 2013, Matthew Heimer writes that ever since the Federal Reserve started pushing interest rates to new lows, it’s been a common theme for retirees and other conservative investors accepting more risk to get a decent income from their portfolios. Last week LPL Financial Holdings agreed with state regulators to pay $2.5 million in fines and restitution for improperly supervising brokers who sold non-traded real estate investment trusts. (LPL neither admitted nor denied wrongdoing.) Non-traded REITs are high-yielding and popular – assets invested in the product have jumped about 50% since 2009, to $65 billion. But they’re for investors to track and value, since they don’t trade on public exchanges.

As Nathaniel Popper reports this week in the New York Times, opaque investments are becoming increasingly popular with less-sophisticated investors, leaving the investors overexposed to risks they don’t understand or vulnerable to fraud. The Financial Industry Regulatory Authority (FINRA) recently issued a notice expressing concern about products like these that could prove “potentially unsuitable and otherwise problematic for retail investors.” Other investments on FINRA’s list include business development companies, which invest in the debt of small privately held businesses, and private placement securities, which represent direct investments in such firms.

If you sustained investment losses due to your stock broker or financial advisor’s recommendations regarding non-traded REITs, private placements, or other complex products, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website and complete our online form at: http://www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

brokerage supervisory deficiencies · brokers recommending risky investments · elder abuse in investments · Financial Industry Regulatory Authority · FINRA · FINRA arbitration · finra lawyer · fort lauderdale securities fraud lawyer · high risk for long term investors · high risk investments · high risk REITs · high-risk private placements · inadequate supervisory procedures by broker/dealers · Lars K. Soreide · LPL · LPL Financial LLC · LPL fined over REIT sales · LPL nontraded REITs · LPL REIT investors · LPL sale to elderly · LPL sued by Massachusetts · non-traded real estate investment trusts · Non-traded REIT loss lawyer · Non-traded REITs · private placements · REIT · Soreide Law Group PLLC · Unsuitable investments to elderly

The following information is from FINRA’s website under “Disciplinary and Other FINRA Actions, January, 2013.”

Alison Marie Janke (CRD #4409155, Registered Representative, Port Richey, Florida)

was fined $11,600, which includes the disgorgement of financial benefit received of $6,600, and suspended from association with any FINRA member in any capacity for three months.

Without admitting or denying the findings, Alison Janke consented to the described sanctions and to the entry of findings that she had participated in a private securities transaction without providing prior written notice to her member firm.

Ms.Janke referred a customer who was seeking alternative investments to a registered representative at a different firm, where the customer invested $200,000 in a real estate investment trust (REIT) through the other registered representative. Alison Janke not only referred the customer to another representative, but also attended the meeting with the customer and the other representative, and assisted with the completion of the purchase transaction.

The findings stated that a limited liability company Janke owned received a $6,600 payment in connection with the sale of the REIT.

The suspension is in effect from December 3, 2012, through March 2, 2013.
(FINRA Case #2011030660801)
This ends the information from FINRA’s website.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you find yourself in this situation, or a similar situation with your broker or financial advisor, call for a free consultation with an attorney, 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

Alison Janke FINRA fine and suspension · Alison Marie Janke Port Richey FL · broker referring customer to another firm · brokerage supervisory deficiencies · brokers recommending risky investments · failure to supervise brokers · Financial Industry Regulatory Authority · FINRA · finra lawyer · fort lauderdale securities lawyer · high risk investments · inadequate supervisory procedures by broker/dealers · Lars K. Soreide Soreide Law Group · private securities transactions without written notification · Real Estate Investment Trust · REIT · REIT loss Lawyer · REIT recovery lawyer · stock loss · supervisory failures

Soreide Law Group is currently investigating potential claims regarding the sale of variable life insurance policies and certain Real Estate Investment Trusts (REITs) sold by former Ameriprise financial advisor, Tracey Crownover. Ms. Crownover was terminated by Ameriprise for failing to follow firm policies. Tracey Crownover has over 25 reported customer disputes through the Financial Industry Regulatory Authority (FINRA).

If you feel you may have a claim against former Ameriprise broker Tracey Helaine Crownover, call 888-760-6552.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, represents clients nationwide before FINRA. If you or a loved one have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. Visit our website at: http://www.securitieslawyer.com.

Ameriprise Financial Inc · brokerage supervisory deficiencies · brokers recommending risky investments · Financial Industry Regulatory Authority · FINRA · FINRA arbitration · finra lawyer · finra securities arbitration · fort lauderdale securities fraud lawyer · inadequate supervisory procedures by broker/dealers · Lars K. Soreide Soreide Law Group · life insurance fraud · life insurance lawyer · life settlement investments · real estate investment trusts · REIT · REIT recovery lawyer · REITs · risky investments · securities lawyer · Stock fraud lawyer · stockbroker misconduct · supervisory failures · Tracey Crownover · Tracey Crownover Ameriprise · variable life insurance lawyer · variable life insurance policies

Soreide Law Group, PLLC, is conducting an investigation into Behringer Harvard REIT I.

Earlier this year, Behringer Harvard REIT I lost two properties in Minnesota and St. Louis to foreclosure. At midyear, the company listed $3.98 billion in assets and $2.509 billion in liabilities.

There are now lawsuits stating that share values in the REIT have fallen from about $10 in the original offering to currently as little as $2.40 in the secondary market. Some of the claims in the lawsuit allege that the Behringer Harvard REIT’s officers misrepresented its financial results and prospects. Other claims in the suit state that officers charged excessive fees and “compensated themselves handsomely out of the proceeds they have raised from the offerings.”

If your stock broker or financial advisor sold you Behringer Harvard Strategic Opportunity Fund I, and you sustained a significant loss of your investment, call Securities Lawyer, Lars Soreide, at 888-760-6552 for a free consultation, or visit Soreide Law Group’s website at: http://securitieslawyer.com.

Behringer Harvard · Behringer Harvard lawsuit · Behringer Harvard lawyer · Behringer Harvard REIT I · brokerage supervisory deficiencies · brokers recommending risky investments · excessive fees by brokers · Financial Industry Regulatory Authority · FINRA · FINRA arbitration · fort lauderdale securities lawyer · high risk investments · Lars K. Soreide Soreide Law Group · misrepresentation of fiancial prospectus by stockbrokers · misrepresentation of stock value · REIT · REIT loss Lawyer · REIT losses · stock broker fraud · stock loss

Soreide Law Group, PLLC, and Securities Attorney Lars K. Soreide, are investigating James J. Albright, Jr., and Sagepoint Financial, Inc., previously known as AIG Financial Advisers, of Manitowoc, Wisconsin.

The alleged claims are based on Albright’s recommendations to his clients to purchase unsuitable, risky and illiquid non-traded real estate investment trusts (“REITs”). Due to the result of Albright’s alleged sales practices, his clients suffered substantial losses and cannot access their funds, which are now locked into illiquid investments.

Some of the REITs involved are: KBS, Behringer Harvard, G, NNN Healthcare Office, and Inland Western.

For years, Soreide Law Group has been cautioning our clients and readers of our blog, about the dangers of these risky REIT investments, including, but not limited to, the illiquidity, and high commissions paid to the brokers. Non-traded REITs are now being scrutinized by the securities regulators. They are watching in particular the suitability for the individual investor, asking whether the investment is suitable and how these products sold or ‘pitched’ to the customer. Non-traded REITs have declined dramatically in value over the past several years.

AIG Financial Advisers · brokers recommending risky investments · failure to supervise brokers · Financial Industry Regulatory Authority · FINRA · FINRA arbitration · high risk investments · illiquid long term nontraded REITs · inadequate supervisory procedures by broker/dealers · James Albright Manitowoc WI · James J Albright Jr · Lars K. Soreide · Mortgage REITs · non-traded real estate investment trusts · Non-traded REITs · REIT · risky investments · SagePoint Financial Inc. · Stock fraud lawyer · Unsuitable REIT investments

Soreide Law Group is currently investigating claims on behalf of our clients who may have suffered losses by investing in Amidee Capital and the Inland American REITs. They are non-traded Real Estate Investment Trusts, commonly known as ‘REITs’, which may have liquidity and redemption risks that may have not been known to investors.   

If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations regarding these or other non-traded REITs, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website and complete our online form at: www.securitieslawyer.com. 

Amidee Capital REIT · brokers recommending risky investments · Financial Industry Regulatory Authority · FINRA · FINRA arbitration · finra lawyer · Inland American Non-Traded REIT · Inland American REIT · Lars K. Soreide · Non-Traded Real Estate Investement Trusts · Real Estate Investment Trust · REIT · REITs · risky investments · securities lawyer

In a March 30, 2012, article from InvestmentNews.com, Bruce Kelly writes that another major nontraded real estate investment trust has seen a sharp drop in its value — but is also stopping paying distributions to investors.

The KBS Real Estate Investment Trust Inc., or KBS REIT I, told investors Monday it was cutting the value of the REIT to $5.16 per share, from $7.32, a drop of 29%. The REIT’s offering price was $10 per share. A number of REITs have seen valuations decline this year as the commercial real estate market continues to struggle and debt weighs on REITs’ balance sheets.

“The new pricing of KBS REIT I reflects the current status of the portfolio, and the discontinuation of distributions was made with the goal of managing the REIT’s debt obligations and cash flows, and attempting to maximize the total return to investors over time,” said Keith Hall, executive vice president of KBS REIT I.

Kelly writes that the REIT is substantial, having raised $1.7 billion in equity in its initial offering, according to an investor presentation the company filed with the Securities and Exchange Commission on Monday. It has $3.4 billion in property assets, and holds loans and other debt of $2.3 billion.

KBS announced that distributions to investors will be cut to zero. The REIT “will discontinue paying monthly distributions to shareholders in an effort to maximize the total amount of capital returned to shareholders over time,” according to the filing. Since July 2009, annual distributions had been 53 cents per share, according to the filing.

KBS said cash flow will be used to meet four objectives: paying down debt, strategically reinvesting capital, attempting to improve the overall return of the company and managing the REIT’s reduced cash flow.

The InvestmentNews.com article said that when asked to clarify what the last objective meant, Mr. Hall noted that it was simply one of the stated company objectives. The KBS REIT has been hit by the broad decline in the commercial real estate market since 2008. Occupancy of the REIT’s real estate holdings declined last year to 85%, from 92% in 2010, according to the filing. Added to that, rents are in decline. “REIT I’s existing rents are rolling downward into this moderately improving rental market that still remains well below peak levels,” according to the filing.

Kelly adds that eighty-one percent of the REIT’s portfolio is in office space, with 10% in bank branches and 9% in industrial real estate. KBS REIT I “has not been immune” to the broad real estate market’s difficulties,” Mr. Hall said. “While some markets have recently made slight recoveries, many markets are still challenged with decreasing occupancy and/or new lease rates at substantially lower levels from the 2007-08 peaks.”

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.

brokers recommending risky investments · Drop in valuation of REITs · Financial Industry Regulatory Authority · FINRA · FINRA arbitration · finra lawyer · finra securities arbitration lawyer · Ft. Lauderdale Securities Lawyer · KBS cut distributions to zero · KBS Real Estate Investment Trust I Inc · KBS REIT I · Keith Hall KBS REIT I · Lars K. Soreide · Lars K. Soreide Soreide Law Group · non-traded real estate investment trusts · Real Estate Investment Trust · REIT · REIT loss Lawyer · REIT portfolio in office space · REIT recovery lawyer · REITs feeling effects of real estate market · REITs not paying investors · risky investments · SEC filing KBS · securities lawyer · stock loss

In an article for InvestmentNews.com, on February 1st, 2012, Mark Schoeff Jr. writes that in a market defined by low interest rates, investors are searching for higher returns. But brokers better be careful how they try to deliver those results, according to their primary regulator.

In a 16 page letter posted on its website, the Financial Industry Regulatory Authority Inc., (FINRA)  outlined its regulatory and examination priorities for 2012. At the top of the list: conduct and products meant to beat the market that instead are unsuitable for investors.

“FINRA is informing its examination priorities against the economic environment that investors have faced since 2008, as these circumstances have steadily contributed to conditions that foster an increased risk of aggressive yield chasing, inappropriate sales practices, unsuitable product offerings, and misappropriation and fraud,” the letter states.

“Given the low yields on Treasuries, we are concerned that investors may be inadvertently taking risks that they do not understand or that are inadequately disclosed as they chase yields,” the letter continues. Lack of liquidity and inadequate cash flow in investments also are red flags Finra is monitoring.

Shoeff writes that among the products that are on FINRA’s watch list for suitability problems: residential- and commercial-mortgage-backed securities, nontraded real estate investment trusts, municipal securities, exchange-traded funds using synthetic derivatives and significant leverage, variable annuities, structured products, private placements and life settlements.

FINRA said that it is undertaking a “broader data collection effort” and targeting its enforcement efforts on high-risk firms.  FINRA warned brokers not to enhance their balance sheets by taking on excessive debt or manipulating their assets and liabilities.

“FINRA is concerned about the additional risks that are being taken as a result of increased leverage, including market, credit and liquidity risk,” the letter states. “We will continue to monitor firms that employ a high degree of leverage, both on-balance-sheet and off-balance-sheet during the upcoming year.”

The InvestmentNews.com article goes on to say that FINRA also is zeroing in on fees.

“We remain concerned about firms’ charging retail investors hidden, mislabeled or excessive fees,” the letter states. “In 2011, FINRA brought cases against several broker-dealers that charged such excessive fees in the form of postage and handling charges that were unrelated to actual costs, and we will continue to investigate firms that appear to be taking advantage of investors through fee schemes.”

FINRA’s guidance on social media is less explicit. It said that it “is a topic on which we continue to receive many questions from firms.” FINRA reiterated that “core regulatory requirements apply to all communications with the public, irrespective of the medium or device used to communicate. Firms must be able to appropriately supervise business communications made using personal devices.”

Schoeff writes that high-frequency trading, and oversight of the creation and redemption of exchange-traded funds, also are listed among the agency’s many priorities. FINRA oversees about 4,460 broker-dealers and enforces the suitability standard, which requires brokers to sell products that fit their clients’ investment needs, timelines and risk appetites.

Other regulators are paying attention to FINRA’s priorities as   well.

“States look at these very highly,” said Steve Thomas, director of Lexington Compliance, a division of RIA in a Box LLC, and former South Dakota chief compliance examiner. “They make individual decisions on whether these items should be added to their state’s examinations.”

brokers recommending risky investments · commercial mortgaged backed securities · elder abuse in investments · Executives failing to look into private placements · failure to supervise brokers · Financial Industry Regulatory Authority · FINRA · FINRA 16 page letter against risky investments · finra lawyer · FINRA targeting high risk firms · FINRA watching broker fees · FINRA watching for risky investments · fort lauderdale securities lawyer · high risk investments · high-risk private placements · investment fraud · investors taking risks · lack of liquidity · Lars Soreide · life settlements · misrepresenting life settlements to customers · Municipal securities · nontraded real estate investment trusts · private placements · products meant to beat the market are unsuitable · real estate fund loss lawyer · Real Estate Investment Trust · REIT · REIT recovery lawyer · risky investments · risky REITs · securities lawyer · Soreide Law Group PLLC · stock broker fraud · Stock fraud lawyer · stock loss · stockbroker misconduct · structured products · targeting elderly investors · Unsuitable investments to elderly · unsuitable private placements · va · variable annuities