FINRA also fined David "Poppy" Lerner, DLA's founder, President and CEO, $250,000.00 and suspended him from the securities industry for one year, followed by a two-year suspension from acting as a principal. Mr. Lerner made false claims about the investment's return, value, and prospects of the REIT at various DLA investment seminars and letters to clients. FINRA also fined William Mason, the firm's head trader, $200,000.00 and suspended him from the industry for six months for charging excessive municipal bond and CMO markups. Mr. Lerner and DLA consented to the entry of FINRA's findings against them. The fines and restitution put closure on two long-running FINRA investigations into the firm, which has 190 registered representatives and six branches in New York and Florida.
FINRA's first action against DLA started with a FINRA complaint, which alleged that DLA engaged in improper sales practices of Apple REIT 10. DLA sold more than $442 million of Apple REIT between January and December 2011 without performing adequate due diligence in violation of its suitability obligations. Earlier Apple REITs under the same management wrongfully valued the REITs shares notwithstanding years of market fluctuations, performance declines, increased leverage, and excessive return of capital to investors. FINRA has required DLA to hire independent consultants to review and propose changes to its supervisory systems and training of non-trade REITs, and DLA has agreed to changes its advertising procedures and pre-file all advertisements and sales literature with FINRA at least 10 days prior to use.
To date, FINRA has not taken any formal action for restitution on behalf of investors in Apple REITs 7, 8, and 9. This does not mean that Apple REIT investors cannot make personal claims for their losses. Investors who have suffered losses in Apple REITs 7, 8, and/or 9 are encouraged to, and are certainly entitled to, file arbitration claims for damages against DLA in order to recover their lost principal.
Have you suffered losses in Apple REITs 7, 8, and/or 9 sold by David Lerner Associates? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.