In July 2014, the Financial Industry Regulatory Authority (FINRA) sanctioned former Ameriprise Financial broker Thomas Sharp for sending emails to clients regarding non-traded real estate investment trusts (REITs) that were not fair and balanced and failed to provide a sound basis for evaluating the facts.
NASD Rule 2210(d) sets forth the content standards for communications with the public and requires in part:
“[a]11 member communications with the public shall be based on principles offair dealing and good faith, must be fair and balanced, and must provide a sound basis for evaluating the facts in regard to any particular security.”
FINRA Rule 2010 requires that brokers observe high standards of commercial honor and just and equitable principles of trade. According to the FINRA Letter of Acceptance, Waiver and Consent, resolving the matter, Sharp’s email contained the following:
[The REIT] “is buying up properties right now where the baby boomers are spending (or going to be spending) their money: ski resorts, golf courses, some retail, local attractions, etc. The properties they already hold are doing well even in this env?romnent because they purchased them for a great price and people are jlocking there as they are cutting back on their spending. They are also snatching up new properties at bargain prices right now.”(Emphasis added).
FINRA found that this was not fair and balanced since it did not provide a clear description of the performance of the REIT’s portfolio since it omitted that the REIT’s largest property owner was experiencing significant financial difficulties.
If you made investments in REITs or other investment products based upon misrepresentations of the broker, contact us to learn how you may be able to recover damages 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.
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