According to reports, the Investment Program Association, a national trade association representing companies that offer direct investments in real estate, recently announced that it is launching its first certification course in the IPA Alternative Investment Proficiency Certification Series covering nontraded Real Estate Investment Trusts.
It is believed that the program should help identify financial advisors who understand how nontraded REITs work and which clients they are right for.
Making sure nontraded REITS are sold to appropriate clients and ensuring that clients are not provided misleading information regarding them have been concerns of the Financial Industry Regulatory Authority. Last October, Finra rocked the nontraded REIT industry when it ordered David Lerner Associates of Syosset, N.Y., to pay $12 million in restitution to customers who bought shares in Apple REIT Ten, a nontraded $2 billion nontraded REIT. Finra said DLA targeted unsophisticated investors and the elderly, selling the illiquid REIT without performing adequate due diligence to determine whether it was suitable for investors.
IPA’s new program is for financial advisors and support staff at broker-dealers and REIT sponsors. Those who complete the program should, among other things, be able to use nontraded REITs in constructing broader portfolios, identify appropriate clients for the products, and explain how nontraded REITs work as well as their tax advantages.
The White Law Group continues to investigate potential FINRA arbitration claims involving nontraded REITs. Due to the high commissions offered by these products, the firm has found that many financial advisors have oversold these products in an effort to maximize their own commissions.
In many cases, brokerage firms have also failed to adequately perform due diligence on the nontraded REITs they sell (as they are required to do by industry rules).
If you have suffered losses in a nontraded REIT and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 312/238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on the firm, visit http://www.whitesecuritieslaw.com.