Berthel Fischer, Financial Services, Centaurus Financial, VSR Financial Services & UDF REITs Sales

According to an Investment News article on Wednesday, four independent broker-dealers that sold United Development Funding (UDF) real estate investment trusts (REITs) could soon face arbitration claims. The UDF Funding IV, which was a nontraded REIT that later listed as a publicly traded REIT, allegedly operated for years as a ponzi scheme. The four firms that were instrumental in selling the product were: Berthel Fisher & Co., Financial Services Inc., Centaurus Financial Inc. and VSR Financial Services Inc. Last week, the FBI raided UDF’s offices in Dallas, Texas, and its shares were down 81% over the last 12 months. Brokers who sold the REIT allegedly promised investors (many of them retirees), promising them high-yield offerings and returns of eight to ten percent. In many cases, half of the retirees’ net worth was tied up in the investments. REITs tend to be high-risk and illiquid products that are not suitable for all investors. A broker has a duty and a responsibility to recommend only those investments that are suitable for their clients. The broker must take into account the client’s net worth, age and investment objectives before selling the product. If he does not, his firm can be liable for investment losses. Please call our securities law firm if you purchased UDF REITs from one of the four previously mentioned companies, or any other companies. You could be entitled to recover your losses.

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