REITs

Broker Michael Mashak in Equitable Advisors, LLC Firm Has Customer Complaint

February 6, 2025 | by Staff Attorney

Currently financial advisor Michael Mashak (Mashak), currently employed by brokerage firm Equitable Advisors, LLC has been subject to at least one disclosable event. These events include one customer complaint. According to a BrokerCheck reports most of the recent customer complaints concern either corporate debt securities or alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

FINRA BrokerCheck shows a pending customer complaint on November 21, 2023.

Claimant alleges REIT purchased was unsuitable.

Broker Hans Sharma in Innovation Partners LLC Firm Has Customer Complaint

February 6, 2025 | by Staff Attorney

Currently financial advisor Hans Sharma (Sharma), currently employed by brokerage firm Innovation Partners LLC has been subject to at least one disclosable event. These events include one customer complaint. According to a BrokerCheck reports most of the recent customer complaints concern either corporate debt securities or alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

FINRA BrokerCheck shows a settled customer complaint on February 24, 2023.

Bought on 12/12/2024, American Realty Capital, hospitality Trust (REIT), Chapter 11 Bankruptcy.

There are Recent Customer Complaints with Broker James Geake in Firm Madison Avenue Securities, LLC

February 5, 2025 | by Staff Attorney

Currently financial advisor James Geake (Geake), currently employed by brokerage firm Madison Avenue Securities, LLC has been subject to at least 3 disclosable events. These events include 3 customer complaints. According to a BrokerCheck reports most of the recent customer complaints concern either corporate debt securities or alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

FINRA BrokerCheck shows a pending customer complaint on December 11, 2024.

Claimants allege unsuitable recommendations of alternative investments.

Broker Michael Tannery in Independent Financial Group, LLC Firm Has Customer Complaint

February 5, 2025 | by Staff Attorney

Currently financial advisor Michael Tannery (Tannery), currently employed by brokerage firm Independent Financial Group, LLC has been subject to at least one disclosable event. These events include one customer complaint. According to a BrokerCheck reports most of the recent customer complaints concern either corporate debt securities or alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

FINRA BrokerCheck shows a pending customer complaint with a damage request of $150,000.00 on January 03, 2025.

The statement of claim does not contain any specific information on which investments were not suitable, just that the complexities of the investments were not fully explained, and the risks were not disclosed in a fair and balanced manner (including their illiquidity, lack of transparency and the nature of a complex alternative investment such as a reit).

Starwood Real Estate Income Trust Inc. (SREIT) – Recovery Options

November 18, 2024 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating broker-dealers and advisors who sold Starwood Real Estate Income Trust Inc., otherwise known as SREIT – a non-traded net asset value real estate investment trust (non-traded REIT). Our representations focus on the failure of brokerage firms to conduct adequate due diligence on Starwood REIT and the failure of advisors to act in the best interests of their clients. Investment advisors are obligated to conduct due diligence on securities recommended by the firm. The due diligence rule is heightened for non-traded REITs because the offering is non-public and investors have access to little publicly available information.

Starwood is the second largest interval non-traded REIT with $9.8 billion in assets. Its competitor – Blackstone REIT – has claimed in 2024 to have assets of $114 billion. Back in May 2024, Starwood REIT announced it limiting redemptions each month due to conditions in the the market for commercial real estate and due to high interest rates. It has been further reported, that Starwood REIT is trying to preserve its available cash and credit as the fund was hit with $1.3 billion in withdrawal requests earlier in 2024 but satisfied less than $500 million of them.

Non-traded REITs have come under close scrutiny by investor groups and regulators for several decades now. Not only do non-traded REITs like SREIT get large fees but they also pay hefty commissions to financial advisors who steer their clients to invest. For example, the aforementioned Blackstone REIT has paid Wall Street brokers more than $700 million in brokerage fees that can add up to a cap of 8.75% of the investment amount.

Advisor Robert Lorente Has Alternative Investment Complaints

February 6, 2024 | by Staff Attorney

Advisor Robert Lorente (Lorente), formerly employed by brokerage firm Aurora Securities (Aurora), has been subject to at least two customer complaints during the course of his career. According to a BrokerCheck report the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In October 2023 a customer complained that Lorente violated the securities laws by alleging that Lorente made unsuitable investments on three REITs purchased in 2019 (February through April). The complaint alleges various claims including negligence, misrepresentation/omission, common law fraud, breach of contract and fiduciary duty. The claim involves a real estate security and alleges $250,000 in damages and is currently pending.

In April 2021 a customer complained that Lorente violated the securities laws by alleging that Lorente engaged in negligence, gross negligence, misrepresentations and omissions, breach of contract relating to investment made in July 2016. The claim involves a real estate security and alleged $35,000 in damages and settled for $12,000.

DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.

Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat safe benchmarks, like U.S. treasury bonds. Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do. Because investors are not compensated with additional return in exchange for higher risk and illiquidity, these kinds of alternative investment products are rarely, if ever, appropriate for investors.

Eric Felsenfeld Has Alternative Investment Complaints

January 22, 2024 | by Staff Attorney

Broker Eric Felsenfeld (Felsenfeld), currently employed at Ameriprise Financial Services, LLC (Ameriprise) and formerly registered with Kingswood Capital Partners, LLC (Kingswood) has been subject to at least three customer complaint during the course of his career. The complaints alleges that Felsenfeld made unsuitable trading recommendations, and recommending an overconcentration of non-traded Real Estate Investment Trusts (REITs) and Business Development Companies (BDCs) among other potential high risk alternative investments.

According to a BrokerCheck report, in February 2021, a customer alleged that Hancock recommended unsuitable investments in BDCs and REITS. The matter settled for $30,000.

In July 2023 another customer complained of breach of contract, breach of fiduciary duty, negligence and negligent misrepresentation, negligence, and violation of regulation best interest. The complaint alleged $22,000 in damages and settled for $22,000.

Broker Valentino Scott Has Alternative Investment Customer Complaints

May 18, 2023 | by Staff Attorney

Advisor Valentino Scott (Scott), currently employed by brokerage firm Centaurus Financial, Inc. (Centaurus) has been subject to at least 10 disclosures including eight customer complaints, one regulatory action, and one employment termination for cause. According to a BrokerCheck report some of the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products and have recovered in excess of $50 million in investor losses.

In July 2022 a customer complained that Scott violated the securities laws by alleging that Scott misrepresented an unsuitable investment. The claim is currently pending and no specific damages are provided.

In March 2022 a customer complained that Scott violated the securities laws by alleging that Scott from October 2013 to the present, Scott made poor recommendations, misrepresented and overconcentrated the customers accounts in unsuitable, illiquid and risky investments. The claim is currently pending and no specific damages are provided.

DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments. Continue Reading

Arkadios Advisor Mark Reffett Accused of Unsuitable Investment Practices

September 21, 2022 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Mark Alexander Reffett (Reffett), currently employed by Arkadios Capital, has been subject to at least one customer complaint his career. According to records kept by the Financial Industry Regulatory Authority (FINRA), Reffett’s customer complaint alleges that Reffett engaged in unsuitable investment strategy and alternative investments.

In May 2020, a customer complained that Reffett violated the securities laws by alleging that Reffett engaged in unsuitable investment strategy and alternative investments beginning in 2014 and continuing to 2016. The claim alleges $1,575,881 in damages and is currently pending.

Alternative investments include a class of products including DDPs such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.

Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat safe benchmarks, like U.S. treasury bonds. Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do. Because investors are not compensated with additional return in exchange for higher risk and illiquidity, these kinds of alternative investment products are rarely, if ever, appropriate for investors. Continue Reading

FINRA Accuses Megurditch Patatian of Falsifying Investor Financial Information to Sell REITs

October 19, 2021 | by Staff Attorney

Advisor Megurditch Patatian (Patatian), formerly employed by brokerage firm Western International Securities, Inc. (Western International) has been subject to at least 13 disclosures of which nine are customer complaints, three are employment terminations for cause, and one is a regulatory action. According to a BrokerCheck report several of the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In February 2021 FINRA filed a complaint against Patatian alleing that he made 81 recommendations to 59 customers to purchase non-traded real estate investment trusts (REITs). According to FINRA, all of the recommendations were unsuitable because he lacked a reasonable basis to recommend the product to any investor. FINRA found that Patatian did not understand the basic features and risks associated with the non-traded REITs and failed to conduct reasonable diligence to understand the product. As part of the misconduct, FINRA alleges that Patatian caused customers to incur taxes and surrender fees by recommended that the customers surrender existing variable annuity policies when he failed to understand the adverse financial consequences of the surrenders. In one instance, FINRA claims that Patatian impersonated a customer in a telephone call with an insurance company to obtain the contract value and surrender fee for the variable annuity. Finally, in order to qualify investors for the REITs, FINRA claims that Patatian recorded inaccurate customer information on his member firm’s customer account and disclosure forms, including by overstating customers’ net worth and exaggerating customers’ years of investment experience. According to FINRA, Patatian inflated the customer’s net worth on the firm’s REIT paperwork in order to evade concentration limits on REIT investments.