Articles Tagged with REIT attorney

shutterstock_70513588-300x200Advisor Gordon Roberts (Roberts), currently employed by Berthel, Fisher & Company Financial Services, Inc. (Berthel, Fisher) has been subject to at least four customer complaints during the course of his career.  According to a BrokerCheck report the customer complaints mostly concerns alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In March 2019 a customer complained that Roberts violated the securities laws by alleging that the client is disappointed with the overall performance of his investments and was misled into believing that his investments, purchased between 2008-2012, were balanced to protect against substantial and significant losses.  The complaint also alleges that he was not kept informed of the losses in his account which negatively impacted his financial well being. The claim is currently pending.

In January 2013 a customer complained that Roberts violated the securities laws by alleging that the financial advisor made unsuitable investments and misrepresentations from December 2008 through December 2012 causing damages. The claim settled for $45,000.

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shutterstock_188606033-300x200Advisor Shimshon Plotkin (Plotkin), currently employed by Independent Financial Group, LLC (Independent Financial) has been subject to at least seven customer complaints during the course of his career.  According to a BrokerCheck report the customer complaints mostly concerns alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In June 2016 a customer complained that Plotkin violated the securities laws by alleging that the financial advisor breached their fiduciary duty, negligence, misrepresentations, and breach of contract among other allegations associated non-traded REITs and other DPPs causing $1,000,000 in damages. The claim was settled for $250,000.

In January 2016 a customer complained that Plotkin violated the securities laws by alleging that the financial advisor breached their fiduciary duty among other allegations associated with alternative investments causing. The claim was denied by the brokerage firm.

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shutterstock_26813263-300x199The securities lawyers of Gana Weinstein LLP are investigating recommendations by brokerage firms for their clients to invest in NorthStar Healthcare Income Inc., (NorthStar Healthcare) – a non-traded real estate investment trust (Non-Traded REIT).  According to newsources, NorthStar Healthcare has suffered massive losses and may only be worth less than 30 cents for every dollar purchased.  In addition, NorthStar Healthcare no longer distributes a dividend – which previously had only been a return of investor principal and not funds from any business operations.  As is too common in the brokerage industry, firms fail to understand the flawed Non-Traded REIT business model and only recommend these products for their 7% commissions – not because they benefit investors.

According to the NorthStar Healthcare’s website, the investment formed to originate, acquire and asset manage equity and debt investments in healthcare real estate. NorthStar Healthcare claims that it is focused on making investments in the needs-driven senior housing sector including independent living facilities, assisted living, memory care, and skilled nursing facilities.  NorthStar Healthcare launched in February 2013 and raised total gross proceeds of $2 billion, including $225.3 million through its distribution reinvestment plan.  The company claims to have a $2.4 billion portfolio of 652 properties as of the third quarter of 2018.

According to The DI Wire, in December 2017, NorthStar Healthcare reduced its distribution rate from 6.67% to 3.31%.  One year later NorthStar Healthcare lowered the net asset value of its common stock from $8.50 per share to $7.10 per share. In addition, in October 2018, NorthStar Healthcare told shareholders that it was suspending its repurchase program – unless the shareholder was dead or had a qualifying disability.

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shutterstock_176198786-300x200Advisor Ashley Woodard (Woodard), currently employed by NYLife Securities LLC (NYLife Securities) has been subject to at least five customer complaints, one tax lien or judgment, and one bankruptcy.  According to a BrokerCheck report some of the customer complaints concern alternative investments and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

Woodard operates under the d/b/a name West End Financial Strategies LLC out of Greenville, South Carolina.  In addition, Woodard has several other disclosed outside business activities including Mancora Enterprises LLC and 9/6 Productions LLC.

In May 2019 a customer complained that Woodard violated the securities laws by alleging that the financial advisor invested them in various alternative, illiquid, and unsuitable securities causing $1,000,000 in damages.  The claim is currently pending.

In April 2019 a customer filed a complaint alleging that Woodard violated the securities laws by alleging misrepresentations and suitability related to the alternative/illiquid securities that were recommended. The claim alleged $100,000 in damages and is currently pending.

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shutterstock_155045255-289x300Advisor Samuel Monchik (Monchik), currently employed by Geneos Wealth Management, Inc. (Geneos Wealth) has been subject to at least two customer complaints.  According to a BrokerCheck report many of the customer complaints concern alternative investments and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In August 2018, a customer filed a complaint alleging that Monchik made unsuitable recommendations, breach of fiduciary duty, and failure to adequately disclose the risks in REITs and direct investments – DPP & LP interests purchased between March of 2008 and November of 2015.  The complaint is currently pending.

In July 2017 a customer filed a complaint alleging that Monchik made unsuitable recommendation of an oil & gas investment in June 2008.  The complaint was denied by the firm.

In September 2008 FSC Securities Corporation terminated Monchik’s alleging that he violated the firm’s policies with respect to transactions in Non-Traded REITs.

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shutterstock_176283941-300x200The securities lawyers of Gana Weinstein LLP are investigating investor losses in VII Peaks Co-Optivist Income BDC II (Peaks Co-Optivist) a business development company (BDC).  According to the company’s SEC filings, Peaks Co-Optivist invests in discounted corporate debt, senior secured term loan and equity-linked debt securities of public and private companies that trade on the secondary loan market for institutional investors and provide distributions to investors.  Peaks Co-Optivist seeks to actively work with the target company’s management to restructure the underlying securities and improve the liquidity position of the target company’s balance sheet.  This strategy targets company management on average 24 months prior to a redemption event to create an opportunity for growth in the investments.

Because Peaks Co-Optivist in non-traded product there are no market pricing for the value of the securities.  The company issued shares at a price of $10.15 per share but due to fees and commissions of $1.015 only $9.135 was used to make investments.  Currently, the company claims that its shares are worth $8.75 per share.  However, this is highly unlikely given that the company has financed most of its distributions through returning investor capital and currently has a distribution rate of only 2.23% annualized.

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shutterstock_183544004-300x200Money Concepts Capital Corp (Money Concepts) advisor Ray Reese (Reese) has been subject to at least three customer complaints.  According to a BrokerCheck report many of the customer complaints concern variable annuities or alternative investments and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In May 2018 a client alleged that Reese misrepresented the product as they were not informed it was not publicly traded and therefore illiquid.  The client alleged damages of $75,000 and the complaint was denied by the firm.

In May 2018 another client filed a dispute alleging unsuitability, negligence, breach of contract, and breaches of Missouri statutes in connection with the loss of assets they deposited for a whole life insurance policy.  The claim is currently pending and seeks $650,000 in damages.

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shutterstock_93851422-300x240The attorneys of Gana Weinstein LLP have reported on the many failings of the non-traded real estate investment trust (Non-Traded REIT) industry for years.  One of the common myths is that these products (such as Behringer Harvard, Cornerstone, Inland and KBS) only failed because of the financial crisis and the decline in the real estate industry.  The truth is these expensive and inefficient products never make sense to invest in.

Proving this to be the case is American Finance Trust Inc., (AFIN) which was sold in 2013 by Schorsch affiliated entities.  When American Finance recently went public approximately $1 billion of the company’s claimed value was wiped out exposing investors to massive losses that had long been hidden by the complex and opague ways the Non-Traded REIT industry operates.

The company itself published its own “estimated per share” net asset value of $23.56, only slightly less than the $25 per share that investors spent to acquire it just the month before.  When AFIN went public it traded as low as $14.80 with a market capitalization of about $1.6 billion – a 40% loss.

As regulators continue to turn their attention to this product and the industry works to lower commissions that brokers earn on this product the truth is now starting to come out.  Brokers have been essentially bribed with 7% commissions for over a decade to sell worthless and inferior products.  Now that commissions have declined sales have plummeted as the pressure to sell Non-Traded REITs dissipates.

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shutterstock_113872627-300x300Former Sandlapper Securities, LLC (Sandlapper) and Independent Financial Group, LLC (Independent Financial) broker Kyusun “Kenny” Kim (Kim) has been subject to at least 23 customer complaints and one regulatory action.  According to a BrokerCheck report many of the customer complaints concern alternative investments and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In June 2018 FINRA barred Kim from the securities industry after making findings of unsuitable recommendations to numerous senior customers to concentrate their retirement assets and liquid net worth in speculative and illiquid securities.  FINRA found that Kim recommended customers to invest in speculative and illiquid investments that were inconsistent with the customers’ moderate or conservative investment objectives and risk tolerances. FINRA found that these recommendations caused Kim’s customers to have an undue concentration of the customers’ retirement assets and liquid net worth in speculative and illiquid investments. FINRA also found that Kim falsified client information on important forms by entering inaccurate and inflated net worth, liquid net worth, and investment experience figures for certain customers so that they appeared eligible to purchase speculative investments.

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shutterstock_76996033-300x200Former Cetera Advisors LLC (Cetera Advisors) advisor Nina Jessee (Jessee) has been subject to at least 21 customer complaints and one employment termination for cause.  According to a BrokerCheck report many of the customer complaints concern variable annuities or alternative investments and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In November 2017, Cetera Advisors allowed Jessee to resign. However, Cetera did disclose that Jessee was found to violate the firm’s policies concerning disclosing outside business activities with the firm prior to engaging in such activities.

Jessee stated that she did not contribute to any of these settlements.

Our firm often handles cases involving direct participation products, Non-Traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments.  These products are almost always unsuitable for investors.  In addition, the brokers who sell them are paid additional commission in order to hype inferior quality investments which provides a perverse incentives by brokers to create an artificial market for products that no honest advisor would sell.

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