Massachusetts issued subpoenas to a collection of high-profile firms including Charles Schwab, Fidelity Investments, Bank of America Corp's Merill Lynch, Morgan Stanley, UBS AG and Wells Fargo & Co, alleging that the firms or their agents have been improperly marketing real estate investment trusts (REITs) to inexperienced investors.
Massachusetts Secretary of the Commonwealth William F. Galvin explained, "While these products are not unsuitable in and of themselves, they are accidents waiting to happen when they are sold to inexperienced investors by untrained agents who push the products to score the large commissions associated with alternative investments."
Through the subpoenas, the state wishes to gain an understanding regarding the firms' supervision, compliance and training programs relative to REITs, oil and gas partnerships and certain private placement offerings.
In May, the Commonwealth of Massachusetts announced a $9.6 million settlements with five firms after alleging improper sales of REITs. The five firms involved in that settlement were Ameriprise Financial Services, Inc., Commonwealth Financial Networking, Lincoln, Financial Advisors Corp., Royal Alliance Associates Inc. and Securities America Inc.
Earlier, in February, the Massachusetts Securities Division ordered LPL Financial to pay over $2 million in restitution and $500,000 in fines for violating non-traded REIT transaction rules.
If you have invested with any firm or broker who has sold you the high-risk complex instrument known as a REIT without fully disclosing the risks or otherwise failing to provide pertinent information relative to the product, and such a transaction has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.
News: Mass. goes after Wall Street; says it targets seniors (NBC News / Reuters)