Massachusetts Settles Allegations With Five Independent Broker Dealers For Improper Sales Of Non-Traded REITs, Returning Over $11 Million To Investors

Thursday, May 23, 2013 11:08
edit
Massachusetts Settles Allegations With Five Independent Broker Dealers For Improper Sales Of Non-Traded REITs, Returning Over $11 Million To Investors

Ameriprise, Commonwealth Financial, Lincoln Financial, Securities America and Royal Alliance yesterday settled charges and agreed to a censure by the Commonwealth of Massachusetts for selling non-traded real estate investment trusts that amounted to more than 10% of the liquid net worth of Massachusetts residents.

This Website Is For Financial Professionals Only


The five BDs agreed to make restitution totaling $11 million to Massachusetts investors and agreed to take action to prevent further violations of rules regarding sales of alternative investments.

 
It will be interesting to see if laws like the one in Massachusetts to avoid highly sales of concentrated positions in alternative investments have been adopted in other states because that presumably could trigger additional actions by other states. According to the complaints filed by the state:
  • Ameriprise sold the REITs in 54 transactions with Massachusetts residents worth about $2.5 million in violation of the state’s net worth requirement.
  • Commonwealth sold the REITs in 42 transactions with Massachusetts residents worth about $2.1 million in violation of the state’s net worth requirement.
  • Lincoln Financial sold the REITs in eight transactions with Massachusetts residents worth about $500,000 in violation of the state’s net worth requirement.
  • Royal Alliance sold the REITs in four transactions with Massachusetts residents worth about $59,000 in violation of the state’s net worth requirement.
  • Securities America sold the REITs in 13 transactions with Massachusetts residents worthabout $778,000 in violation of the state’s net worth requirement.

Comments (1)

...
holtby
Non traded REITS should have more disclosure and compliance review.
holtby , September 30, 2013

Write comment

You must be logged in to post a comment. Please register if you do not have an account yet.

busy