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Ohio Lawyer Explains FINRA's Complaint against David Lerner Associates

Posted on Jun 09, 2011

Last week, the Financial Industry Regulatory Authority (FINRA) initiated a complaint against David Lerner Associates, Inc. The complaint alleges that David Lerner Associates solicited investors to purchase shares of a real estate investment trust (REIT) without conducting a reasonable investigation into whether the investment was suitable for specific investors. It further alleges that David Lerner Associates provided misleading information on its website about the REIT and that the firm specifically targeted “unsophisticated and elderly customers with unsuitable sales of the illiquid security.”

David Lerner Associates is the sole underwriter for Apple REIT Ten, a non-traded $2 billion real estate investment trust that invests in extended stay hotel properties. In the first five months of 2011, the firm sold $300 million of the $2 billion offering. FINRA alleges that since at least 2004, the closed Apple REIT shares have been valued at $11 per share regardless of what was happening in the market, the economic downturn of the commercial real estate market, or the increased leverage against the properties. Investors were allegedly provided with misleading information about the REIT and other Apple REITs sold by the firm.

David Lerner Associates has denied the claims, and a FINRA hearing is possible.

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The law firm of Meyer Wilson represents clients who have been harmed by Ohio investment fraud. We have written a book that you can order for FREE entitled Five Signs of Investment Fraud…And What to Do if It’s Happened to You.  

If you have lost money or had your investments frozen in the Apple REIT recommended by David Lerner Associates, contact an Ohio investment fraud attorney by calling 614-224-6000 locally or 866-827-6537 toll free.