Brokers Pay Heavily For REIT Sales In Massachusetts

Wednesday, June 5, 2013

Real-Estate Investment Trusts (REITs) are back in the spotlight, at least in Massachusetts. REITs, which own and manage income-producing property or other are otherwise involved in real-estate financing, may be considered risky investments. This is due part to the fact that they may not trade on exchanges and may be illiquid for long periods of time.

As Fox Business reports Massachusetts Secretary of State William Galvin recently announced that Ameriprise Financial Inc., Lincoln National Corp., Commonwealth Financial Corp., Royal Alliance Associates and Securities America will pay a total of $975,000 in fines and $8.6 million in restitution for allegedly improperly selling non-traded REITs.

As the Boston Business Journal also reports, the violations center on a rule in Massachusetts that permits investors to put no more than an 10% of the investor's liquid net worth into REITs.
 
Secretary Galvin reported that an investigation found significant and widespread problems with the firms' compliance with their own policies, practices and procedures and adherence with Massachusetts prospectus requirements, which left some investors locked into illiquid and underperforming financial products.
 
In addition to hefty monetary fines, the settlement also requires each of the firms above to examine the REITs they deal with to ensure proper sales and investment procedures were followed.






 


1 comment:

vinothkumar said...

I also agree with you ..... very useful information for us ...... keep it up thanks for this..........






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