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Maddox Hargett & Caruso, P.C. is continuing its investigation into the sales practices of broker/dealers that recommended certain non-traded real estate investment trusts (REITs). Among the firms being reviewed is LPL Financial, LLC.
Earlier this month, Massachusetts regulators filed a complaint against LPL Financial, accusing the firm of dishonest and unethical business practices and failure to supervise agents who made improper sales to clients.
The complaint focuses on sales of seven non-traded real estate investment trusts in violation of state and company rules, according to a statement from Massachusetts Secretary of the Commonwealth William F. Galvin. The seven non-traded REITs include:
-Cole Credit Property Trust II
-Cole Credit Property Trust III
-Cole Credit Property 1031 Exchange
-W.P. Carey Corporate Property Associates 17
-Wells Real Estate Investment Trust II
-Inland American REIT
-Dividend Capital Total Realty
From 2006 to 2009, LPL earned at least $1.8 million in commissions on the sales of the seven non-traded REITs, Galvin said.
“At their core, non-traded REIT products operate through an immensely complex affiliated and subsidiary structure rife with conflict,” Galvin’s complaint stated. “LPL’s lack of adequate training and supervision only exacerbated problems.”
LPL is based in Boston, and is the largest independent U.S.broker/dealer by revenue. The company provides brokerage, advisory and technology services to more than 13,000 financial advisers.
The Massachusetts complaint against LPL seeks a cease-and-desist order, censure and restitution for investors.
If you’ve suffered financial losses because of recommendations by LPL in the non-traded REITs listed in the Massachusetts complaint or by other non-traded REITs, contact us to tell your story.