FINRA has amended their enforcement action against David Lerner Associates to add David Lerner personally for allegedly misleading investors about the risks involved in investing in the Apple REITs (for which David Lerner Associates is the sole distributor) and also about the valuations of the REITs. This is the second enforcement action filed by FINRA against the firm in the past year.
According to the recent complaint, FINRA is taking issue with David Lerner's response to FINRA's first enforcement action, which resulted in the firm sending out more than 50,000 letters to investors to counter the negative press the firm received in the wake of the first enforcement action. The letter also allegedly contains statements made to investors about a possible consolidation of the Apple REITs for listing on a national exchange to dispose of the illiquid shares that they held. FINRA is arguing that the statements about a possible consolidation and listing of the non-traded REITs were made in order to induce new and existing customers to purchase shares in the Apple REITs.
To many investors, this development may come as a surprise. Many investors were not fully informed of the risks involved in purchasing an Apple REIT and believed that this investment was suitable for their investment objectives, age, and risk tolerance.
If you have invested in any of the Apple REITs upon the recommendation of David Lerner Associates, please contact one of our attorneys at 312-332-0000. Our attorneys are representing investors who have suffered losses investing in the Apple REITs along with those who are seeking to rescind (get out of) their investment in these products.