New York Securities Lawyer Blog
William Galvin, Secretary of the Commonwealth of Massachusetts, announced a second round of settlements with five independent broker-dealers regarding the sale of nontraded real estate investment trusts (“REITS”) for $10.75 million in restitution. The $10.75 million will be distributed to customers and investors who purchased nontraded REITS from 2005 to the present at the following five investment firms: Securities America Inc., Ameriprise Financial Services Inc., Lincoln Financial Advisors Corp., Commonwealth Financial Network, and Royal Alliance Associates, Inc. In May 2013, these five independent broker-dealers had already agreed to pay $6.1 million in restitution, as well as $975,000 in fines, regarding their sale of the nontraded REITS. Similarly, LPL Financial LLC agreed to pay $4.8 million in restitution to investors earlier this year. After the first round of settlements earlier this year, the Massachusetts Securities Division commenced a broader investigation into the sale of alternative investments, including REITS, to senior citizens, which sparked this second round of settlements. Mr. Galvin made the following statement, “These investments are popular, but risky. Our investigation showed widespread problems with adherence to the firms’ own policies as wells as the state rule that an investor’s purchase of REITs cannot be more than 10% of that person’s liquid net worth.”
Lax & Neville LLP has nationally represented small broker-dealers, investment advisers, financial services professionals and securities industry companies in regulatory matters and securities-related and commercial litigation. Additionally, Lax & Neville has extensive experience in successfully prosecuting claims on behalf of customers and investors who have suffered losses. Please contact our team of attorneys for a consultation at (212) 696-1999.