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Want to Sell Your Non-Traded REIT?

April 12, 2012

With many of the non-traded REITs ceasing their buy-back programs, dropping in value and no longer making the promised monthly/quarterly distributions, investors who need to liquidate these investments have only the secondary market makers as an option. Non-traded REITs do not trade on any conventional exchange and will only become liquid if the REIT sells out or through reorganization becomes registered and publicly traded.

This recently happened when Inland Western Retail Real Estate, via reverse merger, became Retail Properties of America and is publicly traded. See here for more on Inland Western.

I did a bit of online research today and came up with the following companies who represent themselves as companies who can provide liquidity for non-traded reits and other illiquid securities. Note that I have no experience with any of them and suggest you do some due diligence before entering into any business dealings.

If you own non-traded REITs that have dropped in value, you may be able to recover some or all of your losses through FINRA arbitration.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Notice to Investors with Accounts at Northern Trust Securities, Inc.

The Financial Industry Regulatory Authority (FINRA) found that from October 2006 through October 2009, Northern Trust Securities, Inc.  failed to monitor customer accounts for potentially unsuitable levels of concentration in collateralized mortgage obligations (CMOs). FINRA found that from January 2007 to June 2008 over 43% of the firm’s business was excluded from review.

In June 2011, Northern Trust was fined $600,000 for deficiencies in supervision of the CMO sales and for failure to have in place adequate systems to monitor high-volume securities trades.

Brad Bennett, FINRA Executive Vice President and Chief of Enforcement,
said, “Northern Trust’s deficient systems and procedures allowed more
than 40 percent of its transactions to proceed without review, which in
turn left vulnerable investors exposed to the risk of losing all or a
substantial portion of their principal through potential
over-concentration in CMOs.”

If you had an account with Northern Trust that had transactions involving CMO’s during the applicable time period, you should consult a securities attorney to determine your legal rights. FINRA rules generally limit proceeding with actions  based on events that occurred more than six years prior to filing. Failure to act timely may result in loss of your rights.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Ameriprise- REIT Sales History & Hines REIT

 

In July 2009, Ameriprise Financial Services, Inc., an American Express subsidiary, was sanctioned by the Securities & Exchange Commission and ordered to pay over $17 million dollars for their participation in the unlawful sales of Carey REITs and for receiving over $30 million in undisclosed payments on the sales of Carey REITs  ( CPA:10, CPA:12, CPA:14, CPA:15 & CPA:16) and CNL REITs (CNL Hospitality Properties, Inc. , CNL Retirement Properties, Inc., CNL American Properties Fund).

According to the SEC release, Ameriprise sold over $3.5 billion worth of Carey and CNL REITs without disclosing this revenue, which was in addition to commissions, dealer fees, etc.,  to purchasers. As we have previously warned, non-traded REITs often are burdened with very high up front commissions and fees, thereby limiting the net amount available for investment.

On May 19, 2010, Hines Global REIT, Hines Real Estate Investments, Inc. and Hines Global REIT Advisors LP entered into an agreement with Ameriprise who agreed to act as a selected dealer to sell the IPO. For its services, Ameriprise collected the following fees:

  • 7% selling commission
  • 1.5% marketing fee
  • unspecified amount of due diligence expense reimbursement
  • unspecified amount of costs of technology reimbursement

According to their 12/31/2011 Form 10K filed with the SEC, Hines REIT:

  • was formed in 2003 and raised $2.5 billion in three public offerings between June 2004 and December 2010.
  • was 55% leveraged as of 12/31/2011
  • made per share distributions in 2011, 2010 and 2009 of $.50, $.55 and $.62 respectively, which represents a change from 6% to 5%, based on initial offering price of $10.08.
  • had an estimated share value of $7.78
  • a portion of distributions represents a return of invested capital

The company estimated value of $7.78 represents a loss of 23% from the $10.08 purchase price, however, as we have previously reported, since this is a non-traded REIT the only place it can be sold is on a secondary market, which may result in a sales price of 25% less than the estimated value (ie; $5.83) .

If you have losses in Hines REIT or any other non-traded REIT including Behringer Harvard, Cole Credit Property Trust II, Cornerstone Core Properties, Lerner Apple REITs, Healthcare Trust of America, Inland American, Inland Western, KBS REIT I, Retail Properties of America, Wells  or Wells Timberland REIT, please do not hesitate to contact us.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

 

 

 

How Much is Your Inland Western REIT Worth Now?

Sometimes these things work, sometimes they don’t.

The recent attempt to salvage value by way of a reverse merger of non traded REIT Inland Western Retail Real Estate Trust into publicly traded shares of Retail Properties of America, Inc. (RPAI) did not work…..so far. Perhaps the future will bring an increase in share price, but given the general overall tempo of the economy, I am not optimistic.

Here are the economic of what happened. Inland Western was initially offered at $10 per share. The IPO of RPAI fell somewhat short of the $12 range predicted, coming out at $8. As of the time of this writing, RPAI is trading at $9, which is good, but that equates to just a little over $3 for the original shares of Inland Western. Check out the terms of the offering, not all of the shares can be traded currently.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Invest in KBS REIT I in 2006? Time is Running Out to Bring Claim.

On January 27, 2006, KBS Real Estate Investment Trust (KBS REIT I) launched its initial public offering. KBS I ceased offering shares in primary offering on May 30, 2008. A total of 171,109,494 shares were sold in the primary offering raising $1.7 billion. Since the recent estimated value is just a little over $5 per share, this means investors have lost about $850 million in value.

TIME IS RUNNING OUT TO BRING CLAIMS.

For those investors considering bringing a claim for losses on KBS I for misrepresentation of the nature of the investment or other claims related to the negligence or fraudulent conduct of the selling firm or broker, it is important to act quickly. With limited exception, investors claims will be brought in an arbitration proceeding before the Financial Industry Regulatory Authority (FINRA), whose rules require that cases be brought within six years, measured most commonly from the date of purchase.

This means that for investors who purchased on the IPO or in early 2006, it may already be too late to institute a claim. For others purchasing later in 2006, the six years will soon run on those claims so it is important to act quickly to preserve your legal rights.

In its March 26, 2012, letter to shareholders, KBS I made several announcements that were bad news to investors:

  • Share value is down again. Shares originally sold at $10 are now $5.16.
  • Distributions were one of the key reasons most investors purchased KBS REIT I. The company has suspended further distributions.
  • Share Redemption plan has been amended so that the only redemption allowed are in the event of death or disability. Investors needing liquidity now can only look to the secondary market, where sales are usually at a 20% or more discount from the estimated value.
  • Dividend Reinvestment plan terminated.

If you have questions about your legal rights  in connection with losses you have in KBS REIT I, or any other REIT investment, please do not hesitate to contact us .

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

David Lerner Fined $2.3 Million by FINRA

 

FINRA fined David Lerner Associates, the New York based brokerage firm recently in the headlines for the sale of the Apple REITs, $2.3 million. FINRA’s ruling, which can be accessed here,  resolves charges brought in May 2010 on claims that from 2005-2007, Lerner sold municipal bonds and collateralized mortgage obligations (CMO’s) at “unfairly high prices”, thereby reducing yields to investors.

Lerner was ordered to pay restitution of $1.4 million, plus interest, to affected customers.In addition, Lerner’s head trader William Mason was fined $200,000 and suspended from the industry for six months.

FINRA found that Lerner’s supervisory system for municipal bonds and CMO’s was inadequate and did not have adequate procedures for monitoring the fair pricing and time receipt of orders. The ruling took into consideration Lerner’s disciplinary history. After receiving a Letter of Caution from FINRA about the firm’s markup practices after a 2004 exam, and a Wells Notice on the same topic in 2009, Lerner continued its unfair pricing practice.

David Lerner & Associates as well as their namesake founder, David Lerner are both dealing with FINRA actions filed against them in 2011 in connection with the Apple REITs they sold about $6.8 billion worth to over 122,000 investors. For more information on those proceedings, see my prior post.

REITs, including Behringer Harvard, Inland Western, KBS, Wells, Hines, Cole Credit Property Trust & Cornerstone Core Properties have been in the headlines on nearly a daily basis recently. Many investors were sold non traded REITs with the promise of steady distributions of income and the ability to liquidate. Many REITs have ceased distributions, while values have plummeted and there is no market in which to liquidate, leaving investors hanging.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

 

Rex Securities Law Investigates Richard Sandru on Behalf of Victimized Investor .

Rex Securities Law Investigates Richard Sandru on Behalf of Victimized Investor .

UPDATE April 2013- Since the post below was published in April of 2012, our investigation has expanded substantially.

We now represent a group of former clients who are seeking recovery of losses from LPL Financial. In addition, the SEC just issued an order alleging that Sandru forged documents, took unauthorized financial planning fees and misrepresented account balances to clients while he was employed with Cambridge Investment Research.

Follow this to read the SEC order.

Follow this to read our recent post on the ongoing investigation as well as the SEC order.
___________________________________________________________________________

Richard Sandru, also known as Rick Sandru, the March 2012 FINRA disciplinary proceedings announced that Sandru has been barred from association with any FINRA  member. Here is the excerpt
on Sandru’s exit from the industry from the FINRA website:

Richard Patrick Sandru (CRD #2470082, Registered Principal, Fort Myers, Florida) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Sandru consented to the described sanction and to the entry of findings that he caused financial planning forms for investment advisory customers to be submitted to the corporate accounting office that services his member firm and its investment advisor affiliate without the customers’ knowledge or authorization, and without providing the financial planning services described in the forms so that the customers were improperly charged fees ranging from $500 to $5,000 per financial plan. The findings stated that Sandru generated approximately $321,350 in unauthorized financial planning fees, which he converted for his personal benefit; Sandru received approximately $292,428.50 in accordance with his payout. The findings also stated that Sandru failed to respond to FINRA requests for information and documents and, through counsel, notified FINRA that he would not respond to any requests for information.

We are investigating this matter on behalf of one of Sandru’s
former clients and would appreciate hearing from anyone who has any information that may be helpful to our investigation. A review of
Sandru’s CRD( FINRA’s registration records) reveals the following:

 

  • 4/1/2011-8/30/2011: Sandru worked for Sun Shine Investment Consultants, LLC. Ft. Meyers, FL.
  • 7/1/2009-4/29/2011:
    Sandru worked for Cambridge Investment Research Advisors, Inc. &
    Cambridge Investment Research, Inc. He was terminated for failing to
    inform the firm about a customer issue in accordance with firm policy.
    Fairfield, IA.
  • 9/20/2002-6/29/2009:
    Sandru worked for LPL Financial Corporation. He was permitted to resign
    for attempting to resolve customer concerns without approval from the
    company, in violation of firm policy.Perrysburg, OH.
  • Customer
    complaint that Sandru created a user name and password for their account
    and made unauthorized withdrawals. Damages sought are $945,000.
  • Customer complaint seeking damages of $96,219 for sale of BP ADRS and other investments.
  • Customer complaint in connection with Maumee Authority Stamping.
  • IRS Lien for $89,000 in 2007 for payroll taxes , paid off in 2009.
  • Customer complaint for $18,280 for losses and reimbursement of advisory fees.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870