Boston, Massachusetts based LPL Financial LLC submitted a Letter of Acceptance, Waiver and Consent in which the firm consented to, but did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority's (FINRA) findings that it purchased municipal securities for its own account from a customer and/or sold municipal securities for its own account to a customer at an aggregate price (including any commission or service charge) that was not fair and reasonable. Factors taken into consideration were the best judgment of the broker-dealer or municipal securities dealer as to the fair market value of the securities at the time of the transaction and of any securities exchanged or traded in connection with the transaction; the expense involved in effecting the transaction; the fact that the broker-dealer or municipal securities dealer is entitled to a profit; and the total dollar amount of the transaction. FINRA also stated that in corporate bond transactions, the firm failed to use reasonable diligence to ascertain the best inter-dealer market and failed to buy or sell in such market so that the resultant price to its customer was as favorable as possible under prevailing market conditions. The firm was censured and fined $60,000.
Broker-Dealers have a duty of best execution, which requires that they seek to obtain for its customers' orders the most favorable terms reasonably available under the circumstances. The obligation also provides that in any transaction for or with a customer, a member and persons associated with a member shall use reasonable diligence to ascertain the best inter-dealer market for a security and buy or sell in such market so that the price to the customer is as favorable as possible under prevailing market conditions. If broker-dealers do not use reasonable diligence to obtain the best price for their customers, they may be liable for damages resulting from unreasonable execution. Therefore, investors who have suffered damages due to purchases and/or sales of securities at unreasonable prices can bring forth claims to recover those investment losses against broker-dealers like LPL Financial, which should have prevented the above described misconduct.
Have you suffered losses in your LPL Financial LLC account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against LPL Financial LLC stockbrokers who may have engaged in stockbroker misconduct and caused investment losses.
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 33 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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Showing posts with label LPL Financial. Show all posts
Showing posts with label LPL Financial. Show all posts
Saturday, January 11, 2014
Tuesday, December 17, 2013
INVESTORS CAPITAL CORP. SUBPOENAED BY MASSACHUSETTS REGULATORS OVER SALES OF ALTERNATIVE INVESTMENTS TO SENIORS
Investors Capital Corp. was subpoenaed by Massachusetts in connection with a sweep investigation, which is looking into sales practices involving alternative investments sold to seniors. Investors Capital Corp.'s principal office is located in Lynnfield, Massachusetts. On July 10, 2013, the state's securities division sent the subpoena to Investors Capital Corp. asking for information on sales of the products to state residents who are 65 or over. Some of the non-traditional investments include oil and gas partnerships, private placements, structured products, hedge funds, and tenant-in-common offerings. The state demanded information from Investors Capital Corp. on any such products that have been sold over the past year, the investors who purchased them, the commissions generated, how the sales were reviewed, and all relevant compliance, training and marketing materials Investors Capital Corp. has until July 24 to respond. The state added that being on the list of targeted firms does not indicate wrongdoing.
Although non-traded REITs were not part of the information request, Massachusetts has expressed its heightened concern "that the senior marketplace is being targeted for the sales of these high-risk, esoteric products," Massachusetts Secretary of the Commonwealth William F. Galvin said in a statement. The state has already cracked down on a number of firms for alleged improper sales of non-traded REITs. In February 2013, the state reached a settlement with LPL Financial to pay at least $2 million in restitution and $500,000 in fines related to the sale of non-traded REITs. In May 2013, it settled REIT cases with Ameriprise Financial Services Inc., Commonwealth Financial Network, Lincoln Financial Advisors Corp., Royal Alliance Associates Inc. and Securities America Inc. The five firms agreed to pay a total of $6.1 million in restitution to investors and fines totaling $975,000.
Senior investors have become the targets of unscrupulous brokers, investment advisors and insurance agents. This is due in part to the fact that as we age, our ability to understand newer and complex investments diminishes every year. Therefore, senior retirement savings are ripe for picking and an epidemic of fraud is underway all across America. As a result many states, such as Massachusetts, have enacted laws with harsh penalties and are performing investigative sweeps to protect senior investors.
Broker-dealers have a duty to protect senior investors from broker misconduct by establishing and implementing an adequate supervisory system to oversee sales practices. If broker-dealers do not so, they may be liable to senior investors for damages flowing from an unreasonable recommendation and sale. Are you a senior investor suffering losses in your Investors Capital Corp. account due to an unreasonable recommendation and sale by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Investors Capital Corp. stockbrokers who may have engaged in misconduct and caused investors losses.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Although non-traded REITs were not part of the information request, Massachusetts has expressed its heightened concern "that the senior marketplace is being targeted for the sales of these high-risk, esoteric products," Massachusetts Secretary of the Commonwealth William F. Galvin said in a statement. The state has already cracked down on a number of firms for alleged improper sales of non-traded REITs. In February 2013, the state reached a settlement with LPL Financial to pay at least $2 million in restitution and $500,000 in fines related to the sale of non-traded REITs. In May 2013, it settled REIT cases with Ameriprise Financial Services Inc., Commonwealth Financial Network, Lincoln Financial Advisors Corp., Royal Alliance Associates Inc. and Securities America Inc. The five firms agreed to pay a total of $6.1 million in restitution to investors and fines totaling $975,000.
Senior investors have become the targets of unscrupulous brokers, investment advisors and insurance agents. This is due in part to the fact that as we age, our ability to understand newer and complex investments diminishes every year. Therefore, senior retirement savings are ripe for picking and an epidemic of fraud is underway all across America. As a result many states, such as Massachusetts, have enacted laws with harsh penalties and are performing investigative sweeps to protect senior investors.
Broker-dealers have a duty to protect senior investors from broker misconduct by establishing and implementing an adequate supervisory system to oversee sales practices. If broker-dealers do not so, they may be liable to senior investors for damages flowing from an unreasonable recommendation and sale. Are you a senior investor suffering losses in your Investors Capital Corp. account due to an unreasonable recommendation and sale by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Investors Capital Corp. stockbrokers who may have engaged in misconduct and caused investors losses.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Wednesday, December 4, 2013
LPL FINANCIAL SUBPOENAED BY MASSACHUSETTS REGULATORS OVER SALES OF ALTERNATIVE INVESTMENTS TO SENIORS
LPL Financial LLC was subpoenaed by Massachusetts in connection with a sweep investigation, which is looking into sales practices involving alternative investments sold to seniors. LPL Financial's principal office is located in Boston, Massachusetts. On July 10, 2013, the state's securities division sent the subpoena to LPL Financial asking for information on sales of the products to state residents who are 65 or over. Some of the non-traditional investments include oil and gas partnerships, private placements, structured products, hedge funds, and tenant-in-common offerings. The state demanded information from LPL Financial on any such products that have been sold over the past year, the investors who purchased them, the commissions generated, how the sales were reviewed, and all relevant compliance, training and marketing materials - LPL Financial has until July 24 to respond. The state added that being on the list of targeted firms does not indicate wrongdoing.
Although non-traded REITs were not part of the information request, Massachusetts has expressed its heightened concern "that the senior marketplace is being targeted for the sales of these high-risk, esoteric products," Massachusetts Secretary of the Commonwealth William F. Galvin said in a statement. The state has already cracked down on a number of firms for alleged improper sales of non-traded REITs. In February 2013, the state reached a settlement with LPL Financial to pay at least $2 million in restitution and $500,000 in fines related to the sale of non-traded REITs. In May 2013, it settled REIT cases with Ameriprise Financial Services Inc., Commonwealth Financial Network, Lincoln Financial Advisors Corp., Royal Alliance Associates Inc. and Securities America Inc. The five firms agreed to pay a total of $6.1 million in restitution to investors and fines totaling $975,000.
Senior investors have become the targets of unscrupulous brokers, investment advisors and insurance agents. This is due in part to the fact that as we age, our ability to understand newer and complex investments diminishes every year. Therefore, senior retirement savings are ripe for picking and an epidemic of fraud is underway all across America. As a result many states, such as Massachusetts, have enacted laws with harsh penalties and are performing investigative sweeps to protect senior investors.
Broker-dealers have a duty to protect senior investors from broker misconduct by establishing and implementing an adequate supervisory system to oversee sales practices. If broker-dealers do not so, they may be liable to senior investors for damages flowing from an unreasonable recommendation and sale. Are you a senior investor suffering losses in your LPL Financial LLC account due to an unreasonable recommendation and sale by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against LPL Financial stockbrokers who may have engaged in misconduct and caused investors losses.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Although non-traded REITs were not part of the information request, Massachusetts has expressed its heightened concern "that the senior marketplace is being targeted for the sales of these high-risk, esoteric products," Massachusetts Secretary of the Commonwealth William F. Galvin said in a statement. The state has already cracked down on a number of firms for alleged improper sales of non-traded REITs. In February 2013, the state reached a settlement with LPL Financial to pay at least $2 million in restitution and $500,000 in fines related to the sale of non-traded REITs. In May 2013, it settled REIT cases with Ameriprise Financial Services Inc., Commonwealth Financial Network, Lincoln Financial Advisors Corp., Royal Alliance Associates Inc. and Securities America Inc. The five firms agreed to pay a total of $6.1 million in restitution to investors and fines totaling $975,000.
Senior investors have become the targets of unscrupulous brokers, investment advisors and insurance agents. This is due in part to the fact that as we age, our ability to understand newer and complex investments diminishes every year. Therefore, senior retirement savings are ripe for picking and an epidemic of fraud is underway all across America. As a result many states, such as Massachusetts, have enacted laws with harsh penalties and are performing investigative sweeps to protect senior investors.
Broker-dealers have a duty to protect senior investors from broker misconduct by establishing and implementing an adequate supervisory system to oversee sales practices. If broker-dealers do not so, they may be liable to senior investors for damages flowing from an unreasonable recommendation and sale. Are you a senior investor suffering losses in your LPL Financial LLC account due to an unreasonable recommendation and sale by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against LPL Financial stockbrokers who may have engaged in misconduct and caused investors losses.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Friday, October 25, 2013
EX-LPL FINANCIAL LLC ADVISER BLAKE RICHARDS CHARGED WITH DEFRAUDING INVESTORS AND MISAPPROPRIATING MILLIONS
Blake Richards, a broker formerly with LPL Financial LLC, was charged by the Securities and Exchange Commission (SEC) with defrauding investors and misappropriating $2 million from at least six clients. According to the complaint filed in U.S. District Court for the Northern District of Georgia., Mr. Richards misappropriated client money that constituted retirement savings and/or life insurance proceeds from deceased spouses. The SEC complaint also stated that in order to gain one investor's trust, Mr. Richards went so far as to deliver pain medication during a snowstorm to a client's husband who had been diagnosed with terminal pancreatic cancer. Mr. Richards was an LPL Financial broker from May 2009 until May 2013.
According to the SEC's complaint, Mr. Richards' customers told him they had funds to invest from retirement accounts or proceeds from a life insurance policy. Mr. Richards allegedly told them to write out checks to an entity called "Blake Richards Investments" or "BMO Investments." As a result, the SEC's complaint stated that "Richards, whose production at LPL Financial had been virtually nonexistent over the past few years, began siphoning off funds from clients, and converting them for his personal use."
The charges against Mr. Richards came not too long after LPL Financial, the largest independent broker-dealer with more than 13,000 reps and advisers, was hit with fines and restitution orders. In May 2013, the Financial Industry Regulatory Authority (FINRA) fined LPL Financial $7.5 million for 35 separate e-mail system failures. Also in May 2013, Massachusetts securities regulators said LPL Financial had been ordered to pay $4.8 million in restitution to investors over improper sales of non-traded real estate investment trusts, which was more than double the amount originally revealed - Massachusetts regulators in February 2013 had said LPL would be required to set aside at least $2.2 million in restitution.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages. Therefore, investors who have suffered damages due to Mr. Richards' illegal conduct can bring forth claims to recover losses against LPL Financial, which should have prevented Mr. Richards from committing the described illegal acts.
Have you suffered losses in your LPL Financial investment resulting from broker misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against stockbrokers who have defrauded investors and/or misappropriated investors' funds.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
According to the SEC's complaint, Mr. Richards' customers told him they had funds to invest from retirement accounts or proceeds from a life insurance policy. Mr. Richards allegedly told them to write out checks to an entity called "Blake Richards Investments" or "BMO Investments." As a result, the SEC's complaint stated that "Richards, whose production at LPL Financial had been virtually nonexistent over the past few years, began siphoning off funds from clients, and converting them for his personal use."
The charges against Mr. Richards came not too long after LPL Financial, the largest independent broker-dealer with more than 13,000 reps and advisers, was hit with fines and restitution orders. In May 2013, the Financial Industry Regulatory Authority (FINRA) fined LPL Financial $7.5 million for 35 separate e-mail system failures. Also in May 2013, Massachusetts securities regulators said LPL Financial had been ordered to pay $4.8 million in restitution to investors over improper sales of non-traded real estate investment trusts, which was more than double the amount originally revealed - Massachusetts regulators in February 2013 had said LPL would be required to set aside at least $2.2 million in restitution.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages. Therefore, investors who have suffered damages due to Mr. Richards' illegal conduct can bring forth claims to recover losses against LPL Financial, which should have prevented Mr. Richards from committing the described illegal acts.
Have you suffered losses in your LPL Financial investment resulting from broker misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against stockbrokers who have defrauded investors and/or misappropriated investors' funds.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Tuesday, October 8, 2013
LPL FINANCIAL INVESTOR ALERT - WATCH OUT FOR CHURNING AND UNSUITABLE INVESTMENTS!
LPL Financial LLC, a subsidiary of the LPL Financial holdings, Inc., is an independent broker-dealer headquartered in Boston, Massachusetts and reportedly has over 12,500 registered representatives across the United States operating in one or two person offices. Its branch offices are largely comprised of small producers earning commissions at higher pay out rates than the major full-service brokerage firms, a recipe for disaster when it comes to protecting investors from churning and unsuitable investments and unsuitable investment strategies!
Churning is a violation of Federal and state securities statutes, industry rules and regulations and a breach of fiduciary duty to investors under common law. Churning can occur if an LPL Financial broker exercises control over the investment decisions in your account and purchases stocks or recommends that you purchase and sell stocks for his benefit, i.e., commissions not yours! These trades rarely, if ever, make the investor any money. In fact, the additional commissions raise the break-even point for the investor to the level where the stock must perform at an extremely high level in order for the investor to make any money.
In every broker-investor relationship, the broker must assess what the investor's goals are as well as his or her risk tolerance. This assessment is based on a number of key factors, including the investor's stated objectives, risk tolerance, financial condition and tax status. It is the broker's responsibility to only pursue investments suitable for that investor based on these factors. A stockbroker is obligated to only recommend suitable investments and investment strategies. If an LPL Financial broker recommends unsuitable investments and unsuitable investment strategies, it can leave you vulnerable to unnecessary risk and losses.
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors' rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor's compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these independent broker-dealers.
There is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to excessive purchases and sales of securities and securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. Generally, no manager is onsite to detect the placement of inaccurate information about a client's investment objectives and financial condition to document the suitability of a particular investment recommendation. There is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, there may be only one compliance audit visit per year at many of these offices. These independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms.
Have you suffered losses in your LPL Financial brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against LPL Financial stockbrokers who engaged in churning, recommended unsuitable investments and unsuitable investment strategies that caused investors losses.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Churning is a violation of Federal and state securities statutes, industry rules and regulations and a breach of fiduciary duty to investors under common law. Churning can occur if an LPL Financial broker exercises control over the investment decisions in your account and purchases stocks or recommends that you purchase and sell stocks for his benefit, i.e., commissions not yours! These trades rarely, if ever, make the investor any money. In fact, the additional commissions raise the break-even point for the investor to the level where the stock must perform at an extremely high level in order for the investor to make any money.
In every broker-investor relationship, the broker must assess what the investor's goals are as well as his or her risk tolerance. This assessment is based on a number of key factors, including the investor's stated objectives, risk tolerance, financial condition and tax status. It is the broker's responsibility to only pursue investments suitable for that investor based on these factors. A stockbroker is obligated to only recommend suitable investments and investment strategies. If an LPL Financial broker recommends unsuitable investments and unsuitable investment strategies, it can leave you vulnerable to unnecessary risk and losses.
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors' rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor's compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these independent broker-dealers.
There is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to excessive purchases and sales of securities and securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. Generally, no manager is onsite to detect the placement of inaccurate information about a client's investment objectives and financial condition to document the suitability of a particular investment recommendation. There is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, there may be only one compliance audit visit per year at many of these offices. These independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms.
Have you suffered losses in your LPL Financial brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against LPL Financial stockbrokers who engaged in churning, recommended unsuitable investments and unsuitable investment strategies that caused investors losses.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Wednesday, June 19, 2013
JAMES MICHAEL O'BRIEN AKA JAY O'BRIEN SUSPENDED BY FINRA FOR SELLING UNAUTHORIZED INVESTMENTS
James Michael O'Brien aka Jay O'Brien, a broker formerly with Boston, Massachusetts based LPL Financial LLC, submitted a letter of acceptance, waiver, and consent after the Financial Industry Regulatory Authority (FINRA) entered findings that Mr. O'Brien participated in private securities transactions outside the regular course and scope of his employment with his member firm. Mr. O'Brien neither provided notice of these transactions to the firm nor did he receive approval. Mr. O'Brien, of Encinitas, California, was suspended from association with any FINRA member in any capacity for 18 months. FINRA's findings stated that Mr. O'Brien referred investors to an entity that sold them securities in the form of promissory notes. The total dollar amount of the investments was $2,654,596. For these referrals, Mr. O'Brien was compensated a total of $125,416. The suspension is in effect from January 7, 2013 through July 6, 2014.
Selling away is the inappropriate practice of an investment professional who sells or solicits securities or investments not held, approved, or authorized by the brokerage firm with which the professional is associated. Under NASD and FINRA rules, brokerage firms must approve investments offered by their investment professionals and supervise its sales.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to Mr. O'Brien's fraudulent activity can bring forth claims to recover losses against LPL Financial, which should have prevented Mr. O'Brien from committing the described illegal activity.
Have you suffered losses in your LPL Financial LLC brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against LPL Financial LLC stockbrokers who may have engaged in misconduct and caused investors losses.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Selling away is the inappropriate practice of an investment professional who sells or solicits securities or investments not held, approved, or authorized by the brokerage firm with which the professional is associated. Under NASD and FINRA rules, brokerage firms must approve investments offered by their investment professionals and supervise its sales.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to Mr. O'Brien's fraudulent activity can bring forth claims to recover losses against LPL Financial, which should have prevented Mr. O'Brien from committing the described illegal activity.
Have you suffered losses in your LPL Financial LLC brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against LPL Financial LLC stockbrokers who may have engaged in misconduct and caused investors losses.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Tuesday, June 4, 2013
LPL FINANCIAL CENSURED AND FINED FOR FAULTY SUPERVISORY SYSTEMS GOVERNING DELIVERIES OF MUTUAL FUND PROSPECTUSES
LPL Financial LLC, a Boston, Massachusetts based brokerage firm, submitted a letter of acceptance, waiver, and consent to resolve Financial Industry Regulatory Authority (FINRA) findings that it failed to establish and maintain an adequate supervisory system and written supervisory procedures (WSPs) reasonably designed to ensure timely delivery of mutual fund prospectuses. FINRA's findings stated that the firm was required to provide each of its customers who purchased a mutual fund with a prospectus for that fund no later than three business days after the transaction. The firm executed approximately 16 million mutual fund purchase or exchange transactions, and several million of these transactions required the firm to deliver a mutual fund prospectus to the purchasing customer. Therefore, the firm was required to establish and maintain a supervisory system and WSPs reasonably designed to monitor and ensure the timely delivery of mutual fund prospectuses. FINRA censured and fined the firm a total of $400,000 for all violations committed.
A prospectus is a document that discloses important information about an investment. It typically provides investors with material information about mutual funds, stocks, bonds, and other investments. Such information generally includes a description of the company's business, financial statements, biographies of officers and directors, detailed information about their compensation, any litigation that is taking place, a list of material properties, and any other material information.
In addition, FINRA's findings stated that the firm relied on its brokers for the delivery of mutual fund prospectuses. Each broker was required to obtain the customer's signature on a prospectus receipt form to have a record of the delivery. However, the firm did not have a supervisory system in place that was reasonably designed to ensure that prospectus receipts had been obtained in connection with mutual fund purchases or that a prospectus had actually been delivered timely. The firm's WSPs did not require an adequate review of its brokers' performance of their prospectus delivery obligations. Instead, the firm's procedures consisted of inadequate measures. FINRA further stated that for some time, the firm was aware that its procedures were failing to ensure that brokers consistently obtained prospectus receipts or other evidence of mutual fund prospectus delivery. On at least two occasions, the firm contemplated proposals to adjust its procedures for tracking prospectus delivery compliance, but the firm did not modify or enhance its procedures and continued to rely upon brokers without adequate safeguards to ensure and monitor mutual fund prospectus delivery.
Have you suffered losses in your LPL Financial brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against LPL Financial stockbrokers who may have engaged in misconduct and caused investors losses.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
A prospectus is a document that discloses important information about an investment. It typically provides investors with material information about mutual funds, stocks, bonds, and other investments. Such information generally includes a description of the company's business, financial statements, biographies of officers and directors, detailed information about their compensation, any litigation that is taking place, a list of material properties, and any other material information.
In addition, FINRA's findings stated that the firm relied on its brokers for the delivery of mutual fund prospectuses. Each broker was required to obtain the customer's signature on a prospectus receipt form to have a record of the delivery. However, the firm did not have a supervisory system in place that was reasonably designed to ensure that prospectus receipts had been obtained in connection with mutual fund purchases or that a prospectus had actually been delivered timely. The firm's WSPs did not require an adequate review of its brokers' performance of their prospectus delivery obligations. Instead, the firm's procedures consisted of inadequate measures. FINRA further stated that for some time, the firm was aware that its procedures were failing to ensure that brokers consistently obtained prospectus receipts or other evidence of mutual fund prospectus delivery. On at least two occasions, the firm contemplated proposals to adjust its procedures for tracking prospectus delivery compliance, but the firm did not modify or enhance its procedures and continued to rely upon brokers without adequate safeguards to ensure and monitor mutual fund prospectus delivery.
Have you suffered losses in your LPL Financial brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against LPL Financial stockbrokers who may have engaged in misconduct and caused investors losses.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Thursday, April 11, 2013
LPL FINANCIAL INVESTOR ALERT - LAX SUPERVISION OF INDEPENDENT BROKERS CAN CAUSE LOSSES
LPL Financial LLC is a subsidiary of the LPL Financial holdings, Inc. It is the largest independent broker-dealers whose business model is akin to a franchise operation. LPL Financial is headquartered in Boston, Massachusetts and reportedly has over 12,500 registered representatives across the United States operating in one or two person offices. Its growth in recent years can largely be attributed to layoffs at the major wire houses due to the most recent financial market meltdown. Most of LPL Financial's registered representatives' gross production of revenues is less than $300,000 per year. Its branch offices are largely comprised of small producers earning commissions at higher pay out rates than the major full-service brokerage firms, a recipe for disaster when it comes to protecting investors' rights.
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors' rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor's compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.
Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients' signatures on documents, the placement of inaccurate information about a client's investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices. These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms.
Have you suffered losses in your LPL Financial brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against LPL Financial stockbrokers who engaged in stock brokerage misconduct and caused investors losses.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors' rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor's compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.
Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients' signatures on documents, the placement of inaccurate information about a client's investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices. These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms.
Have you suffered losses in your LPL Financial brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against LPL Financial stockbrokers who engaged in stock brokerage misconduct and caused investors losses.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Thursday, February 7, 2013
LPL FINANCIAL SUED FOR REIT SALES PRACTICES
The Commonwealth of Massachusetts Securities Division has recently charged LPL with "dishonest and unethical business practices." The Massachusetts complaint focused on seven Real Estate Investment Trust (REIT) products:
For most investors, liquidity, income and risk tolerance are a concern, but if you are elderly and retired they are paramount! If you have limited resources and no ability to generate income from other sources to meet your liquidity and income needs then a non-traded REIT is an unsuitable investment. Likewise, if you cannot afford a total risk of loss, then speculative non-traded REITs are unsuitable investments. The suitability problem is compounded when any investor's portfolio is concentrated in non-traded REIT investments. A rule of thumb is that no more than 10% of anyone's investment portfolio should be concentrated in real estate investments, including REIT investments, and that percentage should be far less as a person reaches retirement and advances in age, perhaps zero!
Every brokerage firm has the responsibility of "knowing the customer" and making a customer specific "suitability" determination for every investment recommendation. The "Suitability Rule," Financial Industry Regulatory Authority (FINRA) Rule 2111, requires that a firm or associated person "have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer's investment profile." This is a new rule, but it contains the core features of the previous National Association of Securities Dealers ("NASD") and New York Stock Exchange ("NYSE") suitability rules and codifies well-settled interpretations of those rules. Brokerage firms and their associated persons have always had the responsibility to make suitable recommendations in light of an individual's stated investment objectives and financial condition, tax status, and other relevant factors. According to FINRA, some non-traded Real Estate Investment Trust investments ("REITs") aren't suitable for anyone based on the offering terms, misrepresentations and unreasonable projections by the promoters (see FINRA News Release "FINRA Issues Investor Alert on Public Non-Traded REITs").
The primary cause of the increased number of telephone calls to our office over the last five years is many elderly and retired investors have been steered into non-traded REIT investments as the yields on other income producing investments have steadily declined. According to many investors, the REITS were recommended as safe, secure, and steady income producing investments which sounded to be exactly what many seniors wanted and needed. But these products offer little liquidity for investors who at this stage of their life are likely to need to dip into their investment savings to support their lifestyle or for medical and other emergencies. There is no public market for REITs, and early redemption of shares in REITs is often very limited. In addition, the fees associated with the sales of these products can be high and erode the total return, if they can be sold at all. Further, many of these investments do not truly generate income but make distributions with borrowed money, with newly raised capital, or by a return of principal rather than a return on investment, which can stop at any time. Although non-traded REITs may offer some diversification benefits as part of a balanced portfolio, they all have underlying risk characteristics that make them unsuitable for certain investors, particularly the elderly retired investor with limited financial resources.
Have you suffered losses resulting from an investment in any REIT purchased from LPL Financial? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against LPL Financial who fraudulently offered and sold the REITs to investors.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
- Inland American
- Cole Credit Property Trust II, Inc.
- Cole Credit Property Trust III, Inc.
- Cole Credit Property 1031 Exchange
- Wells Real Estate Investment Trust II, Inc.
- W.P. Carey Corporate Property Associates 17
- Dividend Capital Total Realty
For most investors, liquidity, income and risk tolerance are a concern, but if you are elderly and retired they are paramount! If you have limited resources and no ability to generate income from other sources to meet your liquidity and income needs then a non-traded REIT is an unsuitable investment. Likewise, if you cannot afford a total risk of loss, then speculative non-traded REITs are unsuitable investments. The suitability problem is compounded when any investor's portfolio is concentrated in non-traded REIT investments. A rule of thumb is that no more than 10% of anyone's investment portfolio should be concentrated in real estate investments, including REIT investments, and that percentage should be far less as a person reaches retirement and advances in age, perhaps zero!
Every brokerage firm has the responsibility of "knowing the customer" and making a customer specific "suitability" determination for every investment recommendation. The "Suitability Rule," Financial Industry Regulatory Authority (FINRA) Rule 2111, requires that a firm or associated person "have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer's investment profile." This is a new rule, but it contains the core features of the previous National Association of Securities Dealers ("NASD") and New York Stock Exchange ("NYSE") suitability rules and codifies well-settled interpretations of those rules. Brokerage firms and their associated persons have always had the responsibility to make suitable recommendations in light of an individual's stated investment objectives and financial condition, tax status, and other relevant factors. According to FINRA, some non-traded Real Estate Investment Trust investments ("REITs") aren't suitable for anyone based on the offering terms, misrepresentations and unreasonable projections by the promoters (see FINRA News Release "FINRA Issues Investor Alert on Public Non-Traded REITs").
The primary cause of the increased number of telephone calls to our office over the last five years is many elderly and retired investors have been steered into non-traded REIT investments as the yields on other income producing investments have steadily declined. According to many investors, the REITS were recommended as safe, secure, and steady income producing investments which sounded to be exactly what many seniors wanted and needed. But these products offer little liquidity for investors who at this stage of their life are likely to need to dip into their investment savings to support their lifestyle or for medical and other emergencies. There is no public market for REITs, and early redemption of shares in REITs is often very limited. In addition, the fees associated with the sales of these products can be high and erode the total return, if they can be sold at all. Further, many of these investments do not truly generate income but make distributions with borrowed money, with newly raised capital, or by a return of principal rather than a return on investment, which can stop at any time. Although non-traded REITs may offer some diversification benefits as part of a balanced portfolio, they all have underlying risk characteristics that make them unsuitable for certain investors, particularly the elderly retired investor with limited financial resources.
Have you suffered losses resulting from an investment in any REIT purchased from LPL Financial? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against LPL Financial who fraudulently offered and sold the REITs to investors.
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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Friday, January 25, 2013
MASSACHUSETTS LAWSUIT AGAINST LPL FINANCIAL FOR REIT SALES PAVES THE WAY FOR SUCCESSFUL INVESTOR CLAIMS
A Massachusetts lawsuit against LPL Financial will surely strengthen investors' arbitration claims for losses resulting from illegal sales practices involving real estate investment trusts (REITs). Massachusetts Secretary of the Commonwealth William Galvin charged LPL with failure to supervise registered representatives who sold the non-traded REITs in violation of both state limitations and the company's guidelines. The Massachusetts securities division also charged LPL with dishonest and unethical business practices. Massachusetts charges stem from the sale of $28 million of non-traded REITs to almost 600 clients from 2006 to 2009. Of the REITs listed in the complaint, the highest sales were for Inland American Real Estate Trust, the largest non-traded REIT, with $11.2 billion in real estate assets. Robert Pearce, a 30-year securities and commodities attorney in Boca Raton, FL, believes that Massachusetts' action will certainly generate a flood of cases against LPL. Mr. Pearce added that the Massachusetts complaint will serve as a roadmap for investors and their attorneys to follow when asserting their claims.
REITs invest in a diversified set of income producing real estate properties and mortgages, and they must distribute 90 percent of net earnings to investors. REITs allow investors to partake in real estate investing without directly owning property, which may lock up large amounts of money for long periods of time. The most popular REITs are publicly traded on a stock exchange such as the New York Stock Exchange (NYSE) - they are relatively transparent in their finances and operations and are covered extensively by investment analysts. Non-traded REITs are not listed or registered with securities regulators and are supposed to be available only to accredited investors - $1 million or more in assets or $200,000.00 in annual income. Non-traded REITs disclose their finances publicly and offer shares to the public, but they do not list their shares on an exchange, which is one of many risk factors associated with them.
In LPL's case, Massachusetts' investigation showed significant and widespread issues with LPL's adherence to product prospectus and state requirements. As a result, Massachusetts is seeking full restitution to clients who were sold REITs allegedly in violation of state and prospectus requirements. The state is also seeking an unspecified administrative fine against LPL. Although LPL set forth stringent requirements for the sale for non-traded REITs, it failed to properly review sales of non-traded REITs. In addition, the securities division was able to uncover similar issues with many other REITs sold by LPL. To counter the possibility of future violations, the firm has changed its policies and procedures, creating a separate complex-products team to review all alternative investments. Regardless of the measures taken by LPL, investors are urged to conduct their own investigation prior to making an investment decision involving non-traded REITs. That way, investors will have a clearer understanding of non-traded REITs, which just might keep them from buying the product from the get-go.
Have you suffered losses in real estate investment trusts sold by LPL Financial? 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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
REITs invest in a diversified set of income producing real estate properties and mortgages, and they must distribute 90 percent of net earnings to investors. REITs allow investors to partake in real estate investing without directly owning property, which may lock up large amounts of money for long periods of time. The most popular REITs are publicly traded on a stock exchange such as the New York Stock Exchange (NYSE) - they are relatively transparent in their finances and operations and are covered extensively by investment analysts. Non-traded REITs are not listed or registered with securities regulators and are supposed to be available only to accredited investors - $1 million or more in assets or $200,000.00 in annual income. Non-traded REITs disclose their finances publicly and offer shares to the public, but they do not list their shares on an exchange, which is one of many risk factors associated with them.
In LPL's case, Massachusetts' investigation showed significant and widespread issues with LPL's adherence to product prospectus and state requirements. As a result, Massachusetts is seeking full restitution to clients who were sold REITs allegedly in violation of state and prospectus requirements. The state is also seeking an unspecified administrative fine against LPL. Although LPL set forth stringent requirements for the sale for non-traded REITs, it failed to properly review sales of non-traded REITs. In addition, the securities division was able to uncover similar issues with many other REITs sold by LPL. To counter the possibility of future violations, the firm has changed its policies and procedures, creating a separate complex-products team to review all alternative investments. Regardless of the measures taken by LPL, investors are urged to conduct their own investigation prior to making an investment decision involving non-traded REITs. That way, investors will have a clearer understanding of non-traded REITs, which just might keep them from buying the product from the get-go.
Have you suffered losses in real estate investment trusts sold by LPL Financial? 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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
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