NEW YORK, March 7, 2012 (GLOBE NEWSWIRE) — The Securities Arbitration Law Firm of Meissner Associates, announced that it is investigating and/or pursuing securities arbitration claims against Brokerage Firms with the Financial Industry Regulatory Authority’s (“FINRA”) office of Dispute Resolution on behalf of investors who sustained losses due to unsuitable investment in Real Estate Investment Trusts (REIT). Claims filed with FINRA allege that investors were solicited to invest in such products through fraudulent misrepresentations and omission of material facts. The risks associated with investing in REITs such as the Behringer Harvard Short Term Opportunity Fund, Desert Capital, Cornerstone, and many others were not accurately disclosed to investors seeking conservative investment. In addition, clients at firms like David Lerner & Associates, Merrill Lynch, Morgan Stanley Smith Barney, UBS, Morgan Keegan and LPL Linsco may have been recommended grossly unsuitable investments in highly illiquid and speculative non-traded REITS like Desert Capital, Apple REITs and others.
A REIT is a tax designation for a corporate entity investing in real estate for the purposes of reducing or eliminating corporate tax. In return, REITs are required to distribute 90% of their taxable income into the hands of investors. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks.
From 2008 through today, REITs faced challenges from a slowing economy as well as the late-2000s financial crisis, which, in some cases, depressed share values by 40 to 70%. The collapse of the housing markets and real estate sector has made REIT fraud more apparent. Claims are being brought against brokerage firms for unsuitable recommendations, fraudulent REITS that were Ponzi schemes or failures to disclose high fees and commissions associated with such REITs. Firms targeted unsophisticated, elderly, retired and conservative customers to invest large concentrations of their net worth is such products, which were often illiquid, while misrepresenting such unsuitable risky investments as alternatives to conservative investments; likely due to the high fees and commissions associated with such products, sometimes as high as 15% of the initial investment.
Investors have had billions lost or frozen in non-traded REITs which were recommended by financial advisors at brokerage firms and banks. Many of such non-traded REITs have sustained substantial mark downs in price and/or have been fraudulently over-valued and misrepresented to clients by brokerage firms. In addition, many of such investments are completely illiquid. As a result, clients are unable to access the funds invested, a risk not accurately disclosed to investors.
If you were a victim of such impropriety and have sustained substantial losses by investing in REITs, you may be entitled to recover damages. Please contact the Law Offices of Meissner Associates, www.StockESQ.com which is nationally known for its record win statistics in FINRA Arbitration, toll-free at 866-764-3100 for a free consultation and to explore your legal rights and options.