Tag Archives: securities attorney

Rex Investigates Lyon Capital Management Ltd. Losses

In February 2011 Massachusetts securities regulator William Galvin subpoenaed Bank of America in a case involving local investors who lost $150 million in two collateralized loan obligations. Bank
of America bought commercial loans worth $400 million in 2006 and 2007 to be packaged into securities for sale to investors.

The State of Massachusetts wants to see documents related to two CLO’s (collateralized loan obligations) that were structured and sold to investors during 2007 :

  • Bryn Mawr CLO II
  • LCM VII Ltd.

Galvin wants to determine if the issuer knowingly overvalued the assets in the portfolio to get them off the books by passing them on the unsuspecting investors. In early Feburary 2012, a FINRA panel awarded $1.4 million to a claimant who had invested in Lyon Capital CLO .

Rex Securities Law , located in Boca Raton, FL, 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.

Rex Securities Law

561 391 1900

 

Rex Investigates Inland Western Retail Real Estate Trust (Now known as Retail Properties of America)

NOTE NAME CHANGE: On March 9, 2012, in what is likely a damage control move, Inland Western changed its name to Retail Properties of America. Here is a link to Inland’s press release.

According to the company website, no shares are being repurchased by the company and, as is the case with all non-traded REITs, their website goes on to explain “Inland Western shares are not listed on a national exchange and cannot readily be sold”. Many of you already are aware of that sad fact if you have tried selling you shares.

Annualized per share distributions have fallen from $.6425 in 2008 to $.26 in 2011. A recent tender offer from CMG in late 2011 offered $3.50 per share. According to Inland secondary market trades have ranged from $4.08 to $6.00 per share. Any of these values are far less than the $10 initial offering price.

REITs attracted unsophisticated investors who were promised steady, dependable distributions of income. Many investors were not made fully aware of the risks associated with these investments.

If you have suffered losses in Inland Western Retail 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

Rex Investigates Tenant in Common, TIC, 1031 Exchange Real Estate Investment Losses

Have you or your loved ones suffered losses as a result of purchasing Tenant in Common Real Estate Investments? We are investigating schemes involving the sale of private investments in real estate (office buildings, shopping centers, etc) in investments knows as TIC’s, 1031 exchanges or Tenant in Common real estate investment schemes.

Brokerage firms nationwide sold these investments to unsuspecting
investors, many who are retirees on fixed income who can ill afford to lose capital. Oftentimes the selling firm did little or no due
dilligence to determine the safety of the investment or the suitablity
of the investment for the particular investor involved.

The brokers generally highlighted selling points like the guaranteed
annual income distributions (often 7% or more), but failed to discuss
the risks associated with this type of investment. Since TIC investments are private investments, not traded on any securities market, they can not be readily sold, making them virtually illiquid. This can be  critical for those needing liquidity for living and health expenses.

In February 2012 LPL Financial was hit with a $1.4 million arbitration award for an elderly couple who was sold tenant in common real estate investments. DBSI Inc., one of the largest sellers of TICs declared bankruptcy in 2008, however the broker dealers that sold those deals remain liable for selling these products.

Brokerage firms that sold TIC investments include the following:

Alternative Wealth Strategies
American Wealth Management
Berthel Fisher & Co

Cambridge Investment Research
CapWest Securities Inc.
DBSI Securities
DeWaay Financial Network, Inc.
Equity Services Inc.
FINTEGRA LLC
F.A. Repple & Co.

Grubb & Ellis
INVEST Financial Corp.
Investment Security Corporation
Investors Capital
J.P. Turner Co. LLC
LaSalle St. Securities

KMS Financial Services, Inc.
LPL Financial
MCL Financial Group Inc.
Meridian Capital Partners
Next Financial Group
NPV/Direct Invest
Omni Brokerage Inc.
Orchid Securities
Pacific West Securities

QA3 Financial Corp.
Quest Securities
Questar Capital Corp.
Regent Financial Group
Sanders Morris Harris
Sagepoint Financial

Securities Network LLC
Sigma Financial
U. S. Advisors LLC
U. S. Commercial
WFP Securities
Workman Securities

Rex Securities Law , located in Boca Raton, FL, 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.

Rex Securities Law

561 391 1900

 

FBI – Investment Fraud Big Business in South Florida

FBI Special Agent David Nanz recently offered some observations and advice about scams and frauds, based upon his time in the Miami field office.

“If it seems too good to be true, it probably is”, words we have all heard but all too often fail to heed.

According to Nanz, the most commonly seen schemes are:

  • Ponzi and Pyramid schemes promising high rates of return with little or no risk. There is no legitimate underlying investment. The fraudster uses money from new investors to pay “profits” to later investors.
  • Market Manipulation-Pump and Dumps as they are often called use deceptive practices to manipulate the price of a targeted security, usually an unknown penny stock, which is sold off by the fraudster after he has convinced others to run up the stock price. Beware of the broker who ‘cold calls’.
  • Commodities Fraud-with gold at a recent high, it is no surprise we have seen so many frauds uncovered where business purport to be in the commodity business when they actually soliciting funds for a transaction that never occurs.

Rex Securities Law , located in Boca Raton, FL, 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.

Rex Securities Law

561 391 1900

FINRA Claims Lerner Tried to Coverup Apple REIT Results

On June 20, 2011, two class action suits were filed against David Lerner & Associates over its sales of Apple REITs, a family of real
estate-based securities. This follows a recently filed complaint by the Financial Industry Regulatory Authority (FINRA) alleging that David Lerner Associates, Inc. has been misleading investors about the value of the Apple REIT Ten shares. Here is a link to the  FINRA Press Release about the first regulatory action against Lerner.

Lerner’s company sold $6.8 billion of the securities into some 122,600 customer accounts. His company is a prominent advertiser on New York City radio, famous for its tagline, “Take a Tip from Poppy”, and in recent years has hosted seminars drawing hundreds of investors in the Boca Raton, FL area.

In December 2011, FINRA sued Lerner again, this time amending the prior complaint against Lerner’s company and this time naming him individually, for statements he made in an attempt to quell
anxious customers who had reason to be concerned about their investments since two class actions and a regulatory action were filed questioning the value of the investment. This second action claiming that Lerner misled investors about risk and valuation when marketing $2 billion in non-traded REITs also takes issue with Lerner’s attempt to continue to mislead investors. Here are some
of the highlights of the FINRA complaint against Lerner individually:

WHAT FINRA HAS TO SAY ABOUT LERNER’S RECENT CLAIMS ABOUT APPLE REITS:

  • Since Jan 2011, Lerner has sold $442 million of Apple REIT Ten, “without performing adequate due diligence in violation of its suitability obligations”
  • Earlier Apple REITs inappropriately valued REIT shares at a constant artificial price or $11, not withstanding years of performance declines, increased leverage and excessive return of capital to investors
  • Lerner continues to solicit thousands of customers to purchase Apple REIT  Ten without performing due diligence
  • The performance results for Apple REIT Six, Seven, Eight and Nine were misleading because they did not reflect reduction in distribution rates and did not disclose that income was insufficient to support the promised 7-8% returns and that distributions were partially funded by debt.
  • Between 4/28/2011 and 11/17/2011 Lerner made false, exaggerated and misleading claims regarding investment returns, market values, performance and prospects of the Apple REITs to over 1,000 customers during at least four investment seminars
  • Lerner made untrue and misleading statements regarding the prospects of Apple REIT Ten, calling it a cash cow
  • Lerner slide presentations to sell Apple REIT Ten violate FINRA’s advertising rules
  • On June 6 and July 27, 2011, to counter negative press following FINRA’s initial complaint against Lerner Associates, Lerner signed and sent out letters to over 50,000 Lerner customers that contained exaggerated, false, or misleading statements regarding the valuations, performance, prospects, risks, liquidity, and practices of the Apple REIT programs
  • Since July 13, 2011, Lerner continued to make unsupported claims regarding the merger of the Apple REITs into a company that will be publicly traded.
  • Although REITs Six through Nine are all illiquid and worth less than their $11 per share offering price, Lerner has led customers to believe the purported public offering will reap a windfall for investors

SO WHO DO YOU BELIEVE? FINRA OR LERNER?

Do you believe the regulators, who have no ax to grind other  than to
protect the investing public or do you believe the promoter, who
continues to promote?

Apparently Lerner’s PR campaign is succeeding because investors appear to have been swayed by his promises, notwithstanding the not so subtle warning that is coming from FINRA. We have yet to detect that investors are concerned by the FINRA allegations.

READ THE AMENDED FINRA COMPLAINT FOR YOURSELF AND DECIDE
The text of the complaint  filed by FINRA Department of Enforcement v David Lerner Associates, Inc. and David Lerner (CRD No. 307120) on December 13, 2011 can be accessed here.

Read it and make your own decision regarding what amount of concern to have if you own any of the Apple REITs.

Rex Securities Law , located in Boca Raton, FL, provides representation to  investors  in Texas and 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.

Rex Securities Law

561 391 1900

Exchange Traded Funds-Use Caution

Exchange-traded funds (ETFs) have become very popular over recent years and many investors are led to believe they are conservative and risk free.

This is not always the case.

An ETF is and investment that holds assets (stocks, bonds and/or commodities) which trades on stock exchanges, much like a stock. The fair market value is generally close to the net asset value of the investment it holds, at the end of each day. It is designed to combine the features of a mutual fund or unit investment trust.

Last year, the Florida Office of Financial Regulation (OFR) cautioned retail investors about ETFs. They stated in their release:

“While ETFs are often compared to mutual funds and marketed to investors seeking safe, stable investments, not all ETFs are the same. OFR’s advisory notes that some traditional ETFs may be appropriate for long-term holders, but others, including exotic leveraged and inverse ETFs, may require daily monitoring.”

ETF’s contain risks related to liquidity, fees and tax consequences that investors should understand before investing. Most importantly, if you are a retiree on fixed income, you need to understand whether the ETF your broker is suggesting is right for you and can you sell it quickly if you need cash?

UNG, USO and DBA are ETF’s that were designed to track the price of an underlying commodity, however have not succeded so well. Many brokers sold these investments without adequately disclosing risk issues. Direxion Funds, ProShares and Rydex also offered ETF’s that may not be suitable to retail investors, especially if you are retired.

If you have questions about the way your brokerage account is being handled or investment losses you have suffered, please do not hesitate to contact us .

Rex Securities Law , located in Boca Raton, FL, 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.

Rex Securities Law

561 391 1900

 

 

Grubb & Ellis Seeks Bankruptcy Protection

The  Investment News recently reported that Grubb & Ellis Co. is selling most of its assets to BGC Partners and blaming on the 2007-2009 downturn in US real estate markets, and has filed for bankruptcy protection.

It is not presently known what impact this bankruptcy filing may have on the Grubb & Ellis REITs , such as Grubb & Ellis Healthcare REIT or Grubb & Ellis Apartment REIT.

We are presently investigating claims on behalf of REIT investors, including Grubb & Ellis REITs.

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