Category Archives: Misrepresentation

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

 

Non-Traded REITs–Cause for Concern?

What is a non-traded REIT?

A REIT is a real estate investment trust, with certain tax advantages, that purchases and sometimes operates real estate like office buildings and shopping centers. Non-traded REITs are not market traded, meaning that other than by private sale or sale on a secondary market, a person cannot liquidate the investment until the REIT has a “liquidity event”. A liquidity event may result from listing the REIT on a public market or a sale of assets within the REIT that results in a distribution or liquidation. There may or may not be a liquidity event on the near horizon, should you need to liquidate.

Unfortunately, many investors purchased non-traded REITs without being fully apprised of the risk that distributions might cease, REIT values might fall and there may be no place to sell the investment.

FINRA (The Financial Industry Regulatory Authority) published and Investor Alert that explains the workings of the investment as well as the difference between a non-traded REIT and an exchange-traded REIT. If you own a non-traded REIT or are thinking of buying one, you would be wise to read it.

We have warned in the past that future distributions may not be assured and values are not certain. For years, non-traded REIT values were reported on customer monthly statements at the original purchase price, notwithstanding the dramatic market losses caused during 2008. Only recently has FINRA required REITs to report updated share values. For many years investors may have been unaware that their investment may have declined 50% or more in value.

As recently reported, the following non-traded REIT shares have suffered dramatic losses since they were first offered:

Non-Traded REIT                                                        Loss
Behringer Harvard Opportunity REIT I                      (58.8%)
Behringer Harvard REIT I                                           (53.6%)
Behringer Harvard ST Opportunity Fund                    (96%)
Cornerstone Core Properties                                       (71.8%)
Inland Western Retail Real Estate Trust                      (30.5%)
KBS Real Estate Investment Trust, Inc.                      (48.4%)

Inland Western Retail Real Estate Trust recently changed their name to Retail Properties of America, no doubt to try to freshen their image.

If you have losses as a result of purchasing non-traded REITs, we may be able to help. We are a law firm specializing in the recovery of stock market losses. Located in Boca Raton, FL with a nationwide practice. Free consultation. Contact us at 561-391-1900 or visit our website.

 

THE DAILY TALE OF WOE FOR REITS

For the third day in a row, the Investment News has featured the ongoing problems with REITs (Real Estate Investment Trusts. We featured both of these prior reports, one which highlighted the fact that KBS Real Estate Investment Trust has dropped in value again and distributions have ceased, and another showing the decline in value of the Behringer Harvard, Cornerstone Core, Inland Western and KBS REITs.

Today’s story deals with Inland American Real Estate Trust (value down from $10 to $7.22) and Cornerstone Core Properties (value down from $8 to $2.25). These REITs were sold to a 63 year old lady who noticed that Inland was having some problems and showing losses. During her meeting with the broker in summer of 2008 to discuss this, the broker sold her the Cornerstone REIT. This investor was not aware, until later, that non-traded REITs are not liquid. They do not trade on any conventional market and can only be sold on a few secondary markets that exist, selling at a discount of 20-30% of the estimated value published by the company.

Making matters worse is the fact that these investments were placed in an IRA and comprised over 50% of the value of the IRA. This is clearly an unsuitable over-concentration issue.

Many of our current clients purchased REITs with the promise of steady monthly income and a belief that the investment would maintain value. If you have losses in REIT investments, you may be able to recover some or all of your losses.

Call us at 561 391 1900 or visit our website for more information. We have been helping investors recover stock market losses for over twenty years. Nationwide representation. Free initial consultation.

Rex Securities Law
Boca Raton, FL

KBS REIT I CEASES DISTRIBUTIONS-VALUE DOWN 50%

KBS Real Estate Investment Trust Inc.( KBS REIT I) just  informed investors  it is ceasing the payment of distributions to investors. This no doubt is bad news for those who purchased KBS in anticipation of receiving monthly distributions to supplement retirement income.

Adding further insult to this financial injury, the company lowered the value of the REIT again. It has declined to $5.16 per share, from
$7.32, a drop of 29%. KBS has lost nearly 50% of its value from the  $10 per share offering price.

“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,” according to a quote in the Investment News by
Keith Hall, executive vice president of KBS REIT I.

KBS I raised $1.7 billion, so this recent devaluation indicates investors have  losses of over $800 million. The future does not look too bright for a recovery since the company SEC filings report that occupancy rates declined last year to 85%, from 92% in 2010.

Our investigation indicates that many REITs were touted as being safe and secure investments that would maintain value and provide a steady income stream. Other REITS, including those from Behringer Harvard, Cornerstone Core Properties, Hines, Wells and Inland Western have seen values decline and the curtailment of distributions.

If you were sold KBS REIT or any other REIT on the basis that values and distributions were assured, you may be able to recover some or all of your losses. Rex Securities Law, located in Boca Raton, FL, represents aggrieved investors nationwide. Call us at 561 391 1900 or visit our website.

Initial consultation free.

Investor Recovery Options for Oppenheimer Global Resource Private Equity Fund LP. Losses

March 21, 2012

Have you or your loved ones invested in Oppenheimer Global Resource Private Equity Fund LP ?

According to the Wall Street Journal and other business press, the U.S. Attorneys office, the SEC and the Massachusetts Attorney General  are probing whether this private equity fund that was part of Oppenheimer Holdings Inc overstated the value of its
holdings. According to the WSJ, the overestimation reached as much as $4 million and came in 2009 at a time when the fund was trying solicit new investors. The overestimation resulted in reporting an internal rate of return of 38% compared to a loss of over 6% in the prior period.

The fund, which makes investments of its own and also invests in other private equity funds, thereafter raised $55 million from individuals and institutions based upon what appears to be inaccurate and overstated performance results.

If you purchased this investment you may have claims for damages for misrepresentation and other causes of action. Call to discuss your options with an experienced securities attorney.

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