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Apple REIT 10 Fraud

Apple REIT 10s Securities Investment Fraud Lawsuit | Finra Lawsuit Against David Lerner Associates

Apple REIT 10s Securities Investment Fraud Lawsuit | Finra Lawsuit Against David Lerner Associates

Apple REIT 10s | Lawsuit, Fraud, Lawyer | Securities, Non-Traded Securities, Real Estate Investment Trusts, | David Lerner Associates, Finra lawsuit, Investment Fraud

If you purchased non-traded Apple REITs (real-estate investment trusts) from David Lerner Associates Inc., you may be the victim of securities fraud. In May 2011, the Financial Industry Regulatory Authority (FINRA) filed a lawsuit against David Lerner Associates, accusing the firm of "targeting unsophisticated and elderly customers with unsuitable sales of the illiquid security." According to FINRA, the firm solicited investors to purchase shares in Apple REIT Ten, a non-traded $2 billion REIT, without conducting a reasonable investigation as to whether it was suitable for investors. FINRA also accused David Lerner Associates of providing misleading information about those investments on its website.

If you invested in Apple REITs through David Lerner Associates, you may be entitled to compensation. Lawyers with Parker, Waichman, LLP who specialize in securities fraud lawsuits are offering free legal evaluations to any investor who believes they were defrauded by David Lerner Associates. To find out how our securities fraud lawyers can help you, please contact us today.

FINRA Lawsuit against David Lerner Associates

REITs pool cash from investors to buy property and pay a regular dividend from their rental income. The Apple REIT Ten investment sold by David Lerner Associates invests in extended stay hotels. According to FINRA, since January 2011, as sole underwriter for Apple REIT Ten, David Lerner Associates has sold over $300 million of an open $2 billion offering of the REIT's shares. David Lerner Associates, based in Syosset, New York, made 10% in fees on every non-traded REIT share it sells. Apple REIT sales have generated $600 million for David Lerner Associates, accounting for 60 to 70 percent of the firm's business annually since 1996.

According to the FINRA lawsuit, since 2004, Apple REITs have been "unreasonably" valued at $11 per share, regardless of market conditions, and have been paying returns of 7% to 8%. Finra alleges that David Lerner Associates failed to disclose in descriptions on its website that the income from real estate was insufficient to support these returns. Rather, the distributions were partially funded by "leveraging the REITs through borrowings and returning capital to investors," the complaint states. The complaint also accuses David Lerner Associates of failing to conduct due diligence because the firm “failed to sufficiently investigate the valuation and distribution irregularities” of the product.

Legal Help for David Lerner Associates Apple REITs Investors

If you believe you were misled by David Lerner Associates about Apple REIT investments, you may have valuable legal rights. To learn how our securities fraud lawyers can help you, please fill out our online form or call 1-800-YOURLAWYER (1-800-968-7529) today.


Apple REIT 10 FraudRSS Feed

David Lerner Associates Facing Lawsuits over Apple REITs

Jun 23, 2011 | Parker Waichman LLP
Disgruntled investors appear to be lining up to sue Syosset, New York brokerage David Lerner Associates over the sale of Apple Real Estate Investment Trusts (REITs).  The Apple REITs, which invest in extended stay hotels, also got David Lerner Associates in trouble with the Financial Industry Regulatory Authority (Finra) earlier this month.The latest class action lawsuit against David Lerner Associates was filed this week in federal court in Newark, New Jersey.  It alleges that the...

David Lerner Associates Says its a Scapegoat

Jun 1, 2011 | Parker Waichman LLP
After being hit with a complaint claiming it misled investors about  illiquid real estate investment trusts, or REITs, Syosset, New York-based David Lerner Associates says it’s being made a scapegoat by the Financial Industry Regulatory Authority (Finra).  In a prepared statement, the firm said it “vehemently denies Finra's allegations.Yesterday, David Lerner Associates was hit with a Finra disciplinary action accusing it of marketing unsuitable REITs to elderly and...

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