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Mass. Securities Regulator Launches Investigation Into Unsuitable REIT Sales
By George Miller of Shustak Reynolds & Partners, P.C. posted on Thursday, July 11, 2013.
Massachusetts Secretary of the Commonwealth William Galvin recently announced the state has issued subpoenas to Morgan Stanley, UBS, Fidelity, Merrill Lynch, Wells Fargo and Schwab in connection with an investigation the state recently launched concerning sales of Real Estate Investment Trust (REIT) investments to senior citizens. The subpoenas seek information regarding the firms’ supervisory, compliance and training programs specific to those investments.
While often sold as an alternative fixed income investment, REIT investments are risker than more traditional investments and typically are tied to large-scale commercial real estate projects. Gavin called the investments “accidents waiting to happen” when sold to inexperienced investors. REIT investments often yield much higher commissions to brokers when compared to more traditional investments, which may incentivize some brokers to push the investment on unqualified investors.
Shustak Reynolds & Partners, P.C. handles a wide range of securities and FINRA related issues and has substantial expertise and experience in the securities and brokerage business. If you believe you have been sold an unsuitable REIT or other alternative/private placement investment, please contact our firm’s managing partner, Erwin Shustak, at 619.696.9500 or [email protected].
