February 11, 2013 The Front Page New York Times article today which refers to a case of ours highlights the focus of attention in today’s market place. With investors seeking income due to low interest rates unsophisticated investors are susceptible to pitches relating to sophisticated illiquid investments which like the roach motel, it’s easier to get in than to get out. Non-public Real Estate Investment Trusts (REITS) and Private Placements are known for highly risk and potential for high reward, but are often sold as high income earners to investors seeking income. Unscrupulous Investment Representatives and brokers highlight that such investments avoid the stock market, which fear of ,the media has contributed to, so as to cloak these investments in a blanket of apparent safety when the opposite is true.
Often such investments are illiquid for many years and often they go bankrupt and stop paying the high interest, let alone fail to return the principle. Investors are sold a bunch of hype regarding the underlying investments and how they are investing in the next Google or Apple when in reality these are companies that will likely never make it or they are invested in real estate that have multiple mortgages on them and in an undesirable area. David Lerner Associates have been hit with a 14 million dollar fine from FINRA for its sale of REIT products. In addition, investment in business development companies which hold the debt of small companies also are a new phenomenon in the investment world where investors are vulnerable to high income pitches to their demise.
If you or someone you know have invested in private placements, REITS or a business development company, through a brokerage firm and may not have understood the risks. Call our firm for a free evaluation if your investment losses are in excess of $100,000
*The Meissner firm is nationally known for its unique win statistics. In well over a decade of representing investors the firm has Never lost any in-person investor arbitration. We are not a “mill” like other firms. We don’t accept a case unless we believe we can win and our clients benefit from this as the brokerage firms we file claims against all know us well.* References available upon request.
*Prior results cannot and do not guarantee or predict a similar outcome with respect to any future matter