This week, the Financial Industry Regulatory Authority (FINRA) filed a complaint against David Lerner Associates regarding the investment company’s sale of Apple REIT Ten. In the complaint, FINRA alleges that the company misled customers when marketing Apple REIT Ten and that they targeted “unsophisticated and elderly” investors when looking to sell shares.
Apple REIT Ten is one of a number of non-listed, public Real Estate Investment Trusts (REITs) that have been sold by David Lerner Associates, the sole underwriter, founder, and manager. Throughout the past five months, $300 million in Apple REIT Ten shares, which are invested in hotels across the country, have been sold out of an open $2 billion offering. Over the past nine years, David Lerner Associates have sold shares of nine other Apple REIT securities for a profit of $600 million.
According to allegations outlined by FINRA in yesterday’s disciplinary complaint, David Lerner Associates used the valuations and distribution rates of the closed Apple REITs to sell shares of Apple REIT Ten – distribution rates that FINRA believes were financed by debt. In addition, in the last seven years, Apple REITs have been valued at a constant price regardless of significant changes in the real estate market. Instead of investigating these very strange valuations and distribution rates, the investment company used them to sell Apple REIT Ten.
Unfortunately, an estimated 122,000 people have invested in Apple REITs since 1992. If you lost money or have your investments frozen in the Apple non-traded REITs sold by David Lerner Associates, contact our law firm today and speak with an experienced investment fraud attorney or fill out our online form.
All of our cases are handled on a contingency fee basis and we never request a retainer of any kind in these cases.
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