Seeking Alpha

Robert Rex's  Instablog

Robert Rex
Send Message
This blog is written by Robert H. Rex, Esq. who is a securities attorney and a passionate advocate for investors rights. With over 30 years of legal experience, 25 of which have dealt almost exclusively with the recovery of stockmarket and investment losses for mostly elderly clients, he and his... More
My company:
Rex Securities Law
My blog:
Rex Investment Loss Recovery Blog
View Robert Rex's Instablogs on:
  • Sale Of Tenant In Common Investments (TICs) Results In FINRA Award Vs. ProEquities, Inc.

    May 2013--In FINRA Case # 12-1167, Suzy Asad and Suzy Asad Trust v Mamdoh Abas and ProEquities, Inc., a Los Angeles panel awarded compensatory damages of $379,424, plus accrued interest, costs of $68,838 and session fees of $25,875, jointly and severally against ProEquities, Inc. and broker Mamdoh Aziz Abas. The Claimant alleged elder abuse, securities fraud , negligence and misrepresentation in connection with the sale of tenant in common investments (TICs).

    If you have losses in your brokerage account due to the negligence, misrepresentation or fraud of your broker, you may be able to recover all or a part of those losses through FINRA arbitration. Call us for a no charge consultation to discuss your legal rights.

    Nationwide representation.

    Rex Securities Law

    561 391 1900

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    May 30 3:07 PM | Link | Comment!
  • LPL Financial Non Traded REIT Sales Investigated By Securities Regulators

    Washington State Securities regulators have issued a Findings of Fact and Order to Cease and Desist against former LPL Financial broker Brian Brunhaver, his wife Stacey Brunhaver and his investment advisory firm Brunhaver Financial Services. Regulators have ordered Brunhaver to cease and desist violating various Washington State securities laws, have denied his personal and his company's securities registrations and have imposed fines of $60,000.

    The primary issue raised by the regulators relates to the sale of non-traded real estate investment trusts (REITs) and the fact that he misrepresented the risks associated with these investments and made unsuitable recommendations that clients invest in the REITs.

    The order, which may be accessed here, makes many interesting and significant factual findings, including:

    • Brunhaver sold non-traded REITs to over 200 clients during the last few years he worked for LPL (2007-May 2011) and collected more than $548,000 in commissions on those sales
    • Non-traded REITs are illiquid investments which have no ready market, have less share value transparency than traded REITs, are difficult to value and often fund distributions by borrowing or from the capital raised from new investors.
    • Non-traded REITs present conflicts of interest, have higher up-front fees than traded REITs and have on going management fees.
    • Brunhaver was terminated by LPL in May 2011, ostensibly for communicating with clients through an unapproved email account
    • Brunhaver represented to certain clients that the REITs were safe and/or conservative investments, that no risk was involved and that the investment would be safe and sound, comparing them to the safety of bonds. He told one client that there was no way should could lose money investing in REITs.
    • Some clients were told that their principal investment was guaranteed by the REIT and others were told that the government would guarantee their principal investments in REITs. Some clients were told that the liquidity of the REITs was guaranteed.
    • He told some clients he would waive his commision as an inducement for the clients to make the investment in the REITs, but in fact he did not actually waive his commission.
    • Brunhaver made unsuitable recommendations of the REITs to clients. One client was told to invest 100% of his net worth in REITs. Another was sold an 80% concentration of REITs.
    • Brunhaver submitted forms to LPL that misstated their net worth, income and investment objectives in order to gain approval of these unsuitable investment recommendations. In some cases clients were told to sign forms in blank and Brunhaver completed the forms with inaccurate information. In other cases, Brunhaver altered the account forms to accommodate his scheme.
    • During the investigation Brunhaver and his wife interfered by contacting clients and offering to help them complete the investigatory questionaires from the securities division of Washington.
    • When contacted by the regulators during the investigation, Brunhaver made false and misleading statements by denying that he had been communicating with his clients about the investigation.

    According to FINRA records, he has several pending customer arbitrations, including one involving Inland American REIT.

    See the sidebar of this blog "REITs" for the 60+ posts we have made on the topic of non-traded REITs, including:

    • Behringer Harvard
    • CNL Lifestyles
    • Cole Credit
    • Columbia Property Trust
    • Cornerstone Core
    • Corporate Property Associates
    • Dividend Capital
    • Healthcare Trust of America
    • Hines
    • Inland American
    • Inland Diversified
    • KBS
    • Landmark
    • Lightstone Value
    • Retail Properties of America
    • TNP Strategic
    • United Development Fund
    • Wells
    • Wells Timberland

    We have represented a number of individuals seeking losses on non-traded REITs against LPL as well as several other broker dealers. If you have suffered losses on non traded REITs, call us for information on your legal rights to recover all or a part of your loss.

    No charge consultation.

    Nationwide representation

    Rex Securities Law

    561 391 1900

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    May 24 3:26 PM | Link | Comment!
  • Arbitration Of REIT/Private Placement Claims Results In $1.1 Million Award

    A Financial Industry Regulatory Authority (FINRA) arbitration panel in Minneapolis, MN, recently awarded over $1.1 million to a couple who alleged that the following investments were unsuitable:

    • Medical Capital Holdings
    • DBSI
    • ICON
    • IMH
    • Behringer Harvard REIT

    Claimants stated that the broker misrepresented their investment objective as growth and income as opposed to their stated objectives of preservation of capital and low-risk tolerance. The panel found that these investments in speculative private placements, limited partnerships and real estate investment trusts (REITs) were unsuitable for them. The damages included $500,000 in punitive damages.

    FINRA Case # 11-03704-Eugene Opatz and Ruth Opatz v David Alan Theis, Dougherty Financial Services, Inc. and Securities Monitoring Group, LLC. Theis did not appear and the panel awarded the $1.1M damages against him. The other Respondents reached a confidential settlement with claimants.

    If you believe you have been sold investments that are not suitable or contrary to your stated investment objectives, you may be able to recover losses through FINRA arbitration. Contact us for a no charge consultation.

    Nationwide representation.

    Rex Securities Law

    561 391 1900

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    May 24 12:46 PM | Link | Comment!
Full index of posts »
Latest Followers


More »

Latest Comments

Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.