A REIT is any entity that acts an investment agent for real estate. Often the associations or corporations running the investment also own and operate the underlying income-producing properties.
Brokerage Fined $10M+ for Failure to Supervise Brokers
Brokerages Create Illusion of Fiduciary Duty Through Savvy Marketing
Misleading advertising prevalent among brokerage firms lulls investors into a false sense of security over their investments. They stop checking up on their accounts and their broker because they trust him or her; they’ve been told that is, along with access to information and expertise, the main reason to invest with him or her.
Non Traditional ETFs Bury Gold Rushing Broker and Customers
Regulators Worried About Senior Investors
In many cases, seniors don’t realize their investment portfolios no longer reflect the risk-tolerances and investment objectives they indicated in their broker-dealer account opening documents. On your account statements, your investor profile may not change. It may still be labeled “Conservative” or “Moderate-risk” while the actual investments or overall allocation of investments you hold are anything but conservative or moderate.
Small Investors, Big Losses
New Hampshire to LPL: Alt Investments Must Be Suitable
Beware Phony Senior-Specific Investment Professionals
The law prohibits the use of senior-specialization designations by any person who lacks certification from an accrediting organization. This law makes clear that using a phony senior-specific designation that falsely implies some financial expertise in the investment needs of our elderly investors is against the law.
Last Year, Energy Stocks Went Bust - Did Your Portfolio Go Bust With Them?
Energy securities once regarded as moderate risk can shift into high or very high risk if the natural resources or benchmarks they’re tied to swing dramatically, as did crude oil prices last year. That means that those oil and gas company stock and bonds your broker recommended or purchased prior to this year may have become unsuitable for you as the fracking boom went bust.
FINRA Disciplinary Action Report: February 2015
Investor Choice for Financial Dispute Resolution
Thanks to Democratic Representative from Minnesota, Keith Ellison, “The Investor Choice Act” has been introduced to Congress. The act would ensure that mandatory arbitration agreements are prohibited under US securities laws. As investor advocates ourselves, we support your right to choose, once the facts of your dispute have emerged, the venue most advantageous to you.
FINRA Has Its Eye on These Financial Products
Last month, the Financial Industry Regulatory Authority (FINRA) published its Regulatory and Examinations Priorities Letter. While the express purpose of this letter is to advise stock brokers and compliance officers about the focus of the accreditation exams many of them will be taking in 2015, the letter also indirectly puts investors and securities professionals on notice.
FINRA Disciplinary Report January 2015
The Collapse of High Risk, High Yield Oil and Gas MLP Stocks
By introducing an inappropriate amount of risk into your investment portfolio through oil and gas MLP stocks (or any other publicly or privately-traded security or product, for that matter), you may be able to pursue your losses due to bad advice through the FINRA (Financial Industry Regulatory Authority, the securities industry’s self-regulating body) arbitration process.
The Green Firm Launches Investigation into Schorsch REITs
Wall Street’s Securities-Based Lending Craze
FINRA NOVEMBER DISCIPLINARY REPORT
Each month and again on a quarterly basis, the agency that regulates the financial industry, FINRA (Financial Industry Regulatory Authority), produces a detailed report that runs down all disciplinary actions recently taken against brokerage firms and brokers. This long list of alleged wrongdoing and misconduct reads a lot like a police blotter. We strongly encourage any investor who suspects their broker and/or broker-dealer of having lost them money on dubious terms to at least skim this report to see if you recognize any names, schemes, products, or securities.
New REIT Rule Adds a Much-Needed Layer of Investor Protection
SEC Approves FINRA-Recommended Rule Change to REIT Reporting
The Securities and Exchange Commission (SEC) finally approved a rule change that would give investors far more clarity on the purchasing price of non-traded real estate investment trusts, or REITs. (If you don’t know what a REITs is, click here). This rule change, recommended by securities industry watchdog, the Financial Industry Regulatory Authority (FINRA), has been a long time coming. But now that it’s here, investors should welcome it with open arms.
The REITs Rule Change Adds a Much-Needed Layer of Investor Protection
Until now, it has been common practice among broker-dealers to list non-traded REITs at a per-share price of $10, regardless of what the actual valuation of the shares may be. The new rule however will force broker-dealers to include a per-share estimated value of the shares of any unlisted direct participation program (DPP) or REIT, along with other relevant disclosures, instead of the generic $10 per-share placeholder.
Digging a little deeper, we find that FINRA has proposed two methodologies by which firms may calculate the new per-share estimates: net investment or appraised value. The way these methodologies work would make the average investor’s headspin. But that’s granular information that shouldn’t really concern retail investors interested in REITs anyway. Rather, the key takeaway here is that the rule change offers greater protection to investors who were not historically receiving accurate representations of the value of their investments in REITs.
Broker-Dealers Now Required to Disclose Nature and Risks of REITs
As previously mentioned, the new rule explicitly requires that more information about DPPs and REITs be disclosed to investors, including a provision for specific disclosures stating that DPPs and non-traded REITs are not listed on national securities exchanges, and are generally illiquid investments whose sale value may be less (often far less) than the value of the shares reported on customer statements.
It is worth remarking here that our firm has represented numerous clients whose financial advisors have irresponsibly steered them into REITs without adequately disclosing the nature, risks, and valuation problems associated with these somewhat notorious investments.
If you or anyone you know has been the victim of broker misconduct or investment fraud, or has been unsuitably recommended DPPs or REITs by your financial advisor, please contact our securities attorneys for a free consultation by calling us toll-free at 1-855-462-3330 or via email by clicking here.