Articles Tagged with Alternative Investments

Chicago-based Stoltmann Law Offices, P.C. is a securities investor protection law firm offering representation nationwide to investors seeking to recover investment losses.  Our team is monitoring and reviewing information in connection with former LPL  financial advisor Donald Stephen Woods. According to published reports, Mr. Woods, of Louisville, Kentucky and currently registered with Thurston Springer Financial, intentionally manipulated and changed documents at LPL to qualify non-traded REIT sales that would have otherwise not been approved. LPL has certain limitations on how much of an investor’s declared liquid net worth can be concentrated in alternative investments, like non-Traded REITs.  Typically, LPL limits this exposure to 25% of liquid net worth, but can be lower for elderly investors and those with more conservative investment objectives. Brokers like Woods get around this limitation by inflating the client’s net worth numbers adjusting them upwards by a few hundred thousand dollars can be the difference between compliance approving the transaction and the broker getting paid his massive commission, and not approving it, leaving the broker to find something else to sell the client.

Ultimately, the responsibility for this sort of amateur chicanery engaged in by Mr. Woods falls on his firm. Stoltmann Law Offices has represented hundreds of investors in cases just like this. Almost always, there is an obvious disconnect or contradiction between the net worth numbers on the alternative investment forms, and the client’s new account forms. Compliance has a responsibility to ensure that brokers like Mr. Woods are not artificially inflating client net-worth numbers on these forms in order to qualify them for the investment. Most of the time all it would take is a simple phone call from compliance to the client to determine the accuracy of these numbers and reveal that the broker either forged the documents altogether, or advised the client to ignore the net worth numbers included on the form, to trust their adviser, and not worry about it.

Non-Traded REITs have been selling at rates not seen since before the financial crisis in 2008. There is one reason for this – commissions.  Non-Traded REITs like those offered by Northstar, Cottonwood, Highlands REIT, KBS Growth & Income REIT, Resource Innovation Office REIT, and InvenTrust Properties Corp., pay brokers like Mr. Woods and their firms like LPL commission rates that are many times higher than if they just sold clients publicly-traded, liquid REITs.  The SEC, FINRA, and NASAA all warn about issues related to these non-traded REITs.  Scholarly articles decry them as being poor investments long term compared to their publicly-traded cousins. Some of the issues about these non-traded REITs include:

AdobeStock_82110313-1-300x125You may be able to bring a claim against FSC Securities for Brian Presley alternative investment recommendations. We are Chicago-based securities attorneys who represent investors who have lost money because of brokers like Brian Presley. A broker such as Presley has an obligation to only recommend a security that is suitable for his client. If he does not, his firm may be responsible for losses. Please call 312-332-4200 today to find out how to sue FSC Securities on a contingency fee basis. The call to us is free with no obligation. Mr. Presley was accused of allegedly breaching his duties to clients in illiquid investments including oil and gas and non-traded real estate investment trusts (REITs) and other alternative investments. These investments come with high costs and have historically underperformed even safe benchmarks, like U.S. Treasury bonds. These investments can be illiquid and high-risk. Your broker must take into account factors such as your age, net worth and investment objectives before recommending these investments. Otherwise, his firm may be liable for losses.
Brian Presley was registered with Cooper Street Securities from January 1983 until January 1987, and Advantage Capital Corp in Punta Gorda, Florida from January 1987 until February 2009. He is currently registered with FSC Securities in Punta Gorda, Florida and has been since February 2009. He has eight customer disputes against him, some of which alleged misrepresentation, negligence, sale of unsuitable securities and breach of various duties in sale of investments.

Stoltmann Law Offices is investigating VSR Financial Services because of claims that the firm is violating sales practices related to solicited investments in non-traded alternative investments. These include real estate investment trusts (REITs) and Business Development Companies (BDCs). We are pursuing securities arbitration claims against VSR for unsuitable recommendations, misrepresentations and omissions, securities concentration and failure to supervise. All of these are against securities rules and regulations and claims related to these can be brought against the firm. Non-traded alternative investments have risks and costs which make them unsuitable for many investors. Our investigation is related to alternative investments in non-traded REITs and BDCs that include:

America Realty Capital Properties (Vereit);

CNL Corporate Capital Trust;

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