Stockbroker Fraud News Is the Proof in the Pudding
After a blog series on how stockbroker fraud proliferates the non-trade REITs market, I thought it was the perfect time to show you how thousands of investment savvy clients were defrauded using some of the techniques FINRA has warned investors to look for in non-trade REIT markets.
Synopsis of the Stockbroker Fraud
In May of 2011, FINRA filed a complaint against David Lerner & Associates, Inc. (DLA), of Syosset, NY, for misleading practices in regards to the firm’s investment product Apple REIT Ten, a non-traded $2 billion Real Estate Investment Trust (REIT). FINRA said the firm committed stockbroker fraud in two major ways by:
- Not conducting a reasonable investigation to determine whether the product was suitable for investors.
- Providing misleading information on its website regarding the investment product. (The complaint stated that the firm falsified returns on their website.)
Into the Details of the Stockbroker Fraud
As the sole underwriter for Apple REIT Ten, DLA sold over $300 million of an open $2 billion offering of the REIT’s shares between January and June of 2011. Apple REIT Ten invests in the same extended stay hotel properties as a series of other Apple REITs closed to investors. Founded by the same person, since 1992 DLA has been the sole underwriter of Apple REITs, selling $6.8 billion of the securities into approximately 122,600 DLA customer accounts. DLA earns 10 percent of all offerings of Apple REIT securities as well as other fees. Apple REIT sales have generated $600 million for DLA, accounting for 60 to 70 percent of DLA’s business annually since 1996. Read more at FINRA.org.
Sounds like a good bit of business. So where is the stockbroker fraud? Stay tuned to find out!
The Best Help with Stockbroker Fraud
If you are not getting anywhere with resolving your investment disputes, believe you are the victim of stockbroker fraud or just need help discussing your options with the securities arbitration process, call S. David Anton of Anton Legal Group.
S. David Anton, Esquire is a Certified Arbitrator for the Financial Industry Regulatory Authority (FINRA), formerly the NASD, which is the national organization responsible for overseeing the securities industry. He has served as a Judge/Panelist and rendered decisions in many securities arbitration, giving him a unique perspective on his client’s cases.