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Home > Investigations > Sales of Non-Traded REITs by LPL Financial, LLC

Sales of Non-Traded REITs by LPL Financial, LLC

The Florida securities arbitration lawyers at McCabe Rabin, P.A. are investigating the marketing and sales of non-traded real estate investment trusts (“REITs”), including the Inland American Real Estate Trust, Inc., by LPL Financial LLC.

REITs engage in the acquisition, development and management of real estate properties. In 2012, approximately $10 billion of non-traded REITs were sold. Non-traded REITs are attractive to investors because they distribute at least 90% of their taxable income to investors, but they carry substantial risk: no ready market – limited redemption programs; high fees and commissions – typically range from 15-18%; and sporadic valuation. These investments are a cash cow for brokers and firms because of the excessive fees they generate for the firms. Unfortunately, they can be a financial disaster for investors who have been misled about the risks involved, including the suspension of dividends and illiquidity.

Recently, an administrative complaint filed by the Commonwealth of Massachusetts against LPL alleged that, in 95% of the non-traded REIT transactions reviewed, LPL violated state regulatory requirements, prospectus requirements and LPL’s own compliance procedures. The Complaint charged LPL with failure to supervise its brokers who sold the REITs, as well as unethical and dishonest business practices.

The securities arbitration attorneys at McCabe Rabin are investigating whether LPL violated securities regulations and prospectus limitations or made material misrepresentations to investors concerning the nature and risk of non-traded REITs.

Investors nationwide who suffered a loss as a result of an investment in a non-traded REIT purchased from LPL or any other brokerage firm and who may have a FINRA arbitration claim, may contact the Florida attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

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