by Brian Mahany
The bad news continues for investors in the Apple family of Real Estate Investment Trusts (REITs) sold by David Lerner Associates. Apple announced that they will not increase the number of authorized redemptions. That means those David Lerner clients seeking redemption probably will be out of luck. That’s bad news for people who need their money back now.
While the investigation continues, investors are getting increasingly nervous. Non-traded REITs are extremely illiquid. It’s one thing to know that and understand the risks of illiquid securities when investing your money. It’s a horrible thing to find out now.
The question here is how diligent David Lerner Associates’ brokers were in explaining these investments. Some investors say they were never told of the risks.
Investors in the Apple family of products face a double whammy.
The Financial Industry Regulatory Authority is investigating whether potential investors were told that their investments were illiquid meaning its difficult to get your money back out. In the case of Apple, redemptions are limited to just 3% per year and many REITs allow the administrator to cut or eliminate redemptions. Investors may also have been misled as to the safety and market risk of their investment.
David Lerner has 370 representatives. “Who said what” remains to be seen. As the investigation continues, however, more and more investors are likely to find that they can’t get their money back. At least not now.
FINRA has not yet charged Lerner or any of its brokers.
If you were sold an illiquid investment or not apprised of the risks of investing in non traded REITs, you may have a claim against your stockbroker and the broker dealer. Brokers have a duty to fully explain the risks of investments they recommend to you and must insure that their recommendations are suitable for you. If they fail, they could be liable for your losses.
If you feel like you have a claim, call us. Our stockbroker fraud and securities lawyers can help you get your money back, often with no upfront legal fees to you. Contact attorney Brian Mahany at (414)704-6731 (direct) or by email at Our offices are in Milwaukee, Wisconsin; Detroit, Michigan & Portland, Maine. Services are provided anywhere in the U.S.