by Brian Mahany
Almost 2 dozen stock brokerage firms have closed their doors in the last 18 months. This week MCL Financial Group of Santa Ana, California joined the growing list. According to an article in InvestmentNews, MCL had sold a number of illiquid investments and real estate investment trusts (REIT’s).
In filings with the SEC, the company said it generated 26% of its revenue from REITs and 15% from private placements.
Although MCL has a relatively clean record, there has been a large uptick in lawsuits concerning REITs and private placements. MCL was sued last year by the bankruptcy receiver of one failed real estate syndicator. The receiver is seeking a return of commissions. MCL made almost a quarter million dollars from the sale of tenant-in-common (TICs) exchanges.
If all this jargon sounds confusing, it is. Many of the stockbrokers selling these investments did not fully understand them, thereby misapprehending the risks and improperly recommending them to unqualified customers.
If you lost money in REIT’s, limited partnerships or tenant-in-common exchanges, call a securities lawyer. Stockbrokers have a legal obligation to know their customers and know such things as investment experience, risk tolerance and investment objectives. Brokers can be held liable for damages if they make improper or unsuitable recommendations.
What will happen with the lawsuit remains unknown. MCL will apparently continue in business, however. It is reopening as a less regulated investment advisor.
For more information, contact attorney Brian Mahany at (414) 704-6731 (direct) or by email at Our investment fraud lawyers can help you recover your hard earned money anywhere in the United States.
Mahany & Ertl, LLC. Offices located in Milwaukee, Wisconsin; Detroit, Michigan & Portland, Maine. Services nationwide.