David Lerner Associates, Inc. Agrees to $650,000 REIT Settlement
The New Jersey Attorney General’s office announced that David Lerner Associates, Inc. (DLA), a New York securities brokerage, agreed to pay $650,000 to resolve allegations that the firm sold non-traded real estate investment trusts (REITs) to unsuitable investors and failed to keep adequate records for these sales.
Non-traded REITs are potentially risky investments that are not suitable for all investors because they are generally illiquid securities with no public trading market. They may also contain higher fees. As a result, broker-dealers have a duty to carefully screen their customers to make sure that non-traded REITs meet the customer’s investment objectives.
Did you lose money on an unsuitable investment? Our attorneys can help.
DLA sold non-traded REITs to at least 282 investors who did not meet suitability standards.
According to the Attorney General’s investigation, DLA sold three non-traded REITs—Apple REIT Seven, Inc., Apple REIT Eight, Inc., and Apple REIT Nine, Inc.—from 2006 through 2010 to purchase hotels. In total, the sale of these three non-traded REITS raised a total of $4 billion.
DLA sold these non-traded REITs to at least 282 investors who did not meet the suitability standards outlined in each REIT’s prospectus. DLA’s failure to ensure that each of the investors who purchased non-traded REITs met the suitability standards violated both internal firm procedures and New Jersey law.
If you have suffered significant financial losses from being sold unsuitable investments or non-traded REITs, the lawyers of the Business Trial Group may be able to help. With the support of the largest Plaintiff’s law firm in the country, our clients pay no upfront fees or retainers, and we only receive a fee if we successfully recover compensation on your behalf.
For a no cost and no obligation review of your investment losses, please call us at (877) 599 3102 or fill out our case review form.