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

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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.

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