Private Placements

Published on: September 5, 2013

Behringer Harvard REIT I is Now TIER REIT: New Name Doesn’t Solve Investor Problems

Behringer Harvard REIT I changed its name on June 21, 2013, to TIER REIT, Inc.

Behringer Harvard REIT I is Now TIER REIT New Name Doesn’t Solve Investor Problems

Despite the name change which, according to the REIT’S president Scott Fordham was supposed to symbolize “how the company reflects the goals and objectives of its tenants and stockholders in everything it does,” investors continue to be trapped in an investment they can’t sell except at a significant discount on the secondary market. Furthermore, according to stock fraud lawyers, the REIT continues to pay zero distributions.

To make matters worse, the REIT’s latest SEC quarterly report disclosed some disturbing information for investors. Reportedly, notes payable amounting to approximately $221.8 million will come due in 2013 and this amount may increase significantly because of several of the REIT’s loans, which are in default. As a result, the REIT may have to pay over $300 million before the end of 2013 because of its outstanding loans. In addition, the REIT had cash and cash equivalents of only $40.7 million and $71.3 million in restricted cash as of March 31, 2013.

Published on: August 27, 2013

Securities Arbitration Investigations Continue as FINRA Files Formal Complaint Against Thompson National Properties

by InvestorLawyers

Securities fraud attorneys continue to investigate claims on behalf of investors who suffered significant losses in Thompson National Properties (TNP) promissory note investments. Specifically, investors may bave viable claims regarding three note programs sold by TNP from 2008 to 2012 that, according to a Financial Industry Regulatory Authority (FINRA) complaint dated July 30, 2013, allegedly were used in defrauding and deceiving investors. The complaint names Tony Thompson, Thompson National Properties LLC and TNP Securities LLC and is the first formal action against Thompson by FINRA.

According to stock fraud lawyers, $50 million in TNP-sponsored high-yield promissory notes were sold to investors, claiming guaranteed principal and interest. A summary of the allegations b7y FINRA in Mr. Thompson and TNP Securities’ BrokerCheck profile states that they “engaged in transactions, practices or courses of business which operated as a fraud or deceit upon the purchaser.” Furthermore, FINRA’s allegations against TNP Securities and Mr. Thompson include the use of deceptive, manipulative or other fraudulent devices, which allege4dly puts them in violation of FINRA Rule 2020 and the Exchange Act of 1934.

Specifically, the complaint discusses the TNP 2008 Participating Notes Program LLC, the TNP Profit Participation Program LLC and the TNP 12% Notes Program LLC.

Published on: August 15, 2013

Investors Could Recover Losses for TNP-Sponsored Investments

by InvestorLawyers

Stock fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses in several TNP-sponsored investments, including the TNP 2008 Participating Notes Program LLC, sold by Berthel Fisher & Co. Financial Services Inc. and other full-service brokerage firms. Reportedly, around $26 million was raised from investors in total for the TNP 2008 Participating Notes Program and, though Berthel Fisher acted as the underwriter for the deal, the investment was also sold by other broker-dealers.

Investors Could Recover Losses for TNP-Sponsored Investments

According to the allegations made by one investor, Berthel Fisher failed to make the proper disclosures and perform adequate due diligence regarding the TNP 2008 Participating Notes Program. A complaint was filed in the U.S. District Court for the Northern District of Iowa on July 8, which stated, “Berthel Fisher had actual knowledge of the misrepresentations and omission in the 2008 [private-placement memorandum] and failed to investigate red flags that pointed to other misrepresentations and omissions.”

The deal’s sponsor, Thompson National Properties LLC, and chief executive Tony Thompson have also been under investigation by securities arbitration lawyers for the TNP Strategic Retail Trust Inc., a non-traded REIT, and the TNP 12% Notes Program. Allegedly, the TNP Strategic Retail Trust was recommended to many investors for which it was unsuitable, given their age, risk tolerances and investment objectives. Reportedly, the 12% Notes Program, which was designed to raise capital for tenant-in-common real estate operations, suspended interest payments to investors and was in danger of defaulting on two loans.

Published on: August 12, 2013

15 Brokerage Firms Subpoenaed Over Alternative Investment Sales

by InvestorLawyers

Reportedly, 15 brokerage firms have been subpoenaed by the Commonwealth of Massachusetts as part of an investigation into sales of alternative investments to senior citizens.

15 Brokerage Firms Subpoenaed Over Alternative Investment Sales

The following firms have reportedly been subpoenaed: Merrill Lynch, Morgan Stanley, UBS Securities LLC, Charles Schwab & Co. Inc., Fidelity Brokerage Services LLC, Wells Fargo Advisors, ING Financial Partners Inc., TD Ameritrade Inc., LPL Financial LLC, MML Investor Services LLC, Commonwealth Financial Network, Investors Capital Corp., WFG Investments Inc. and Signator Investors Inc.

According to securities arbitration lawyers, the state sent subpoenas to the firms on July 10, 2013, requesting information regarding the sale of certain products to Massachusetts residents 65 or older over the last year. Nontraditional investments include private placements, hedge funds, oil and gas partnerships, tenant-in-common offerings, and structured products.

Published on: July 30, 2013

Investors Could Recover ATP Oil and Gas Note Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses in ATP Oil and Gas 11.875 Percent Senior Second Lien Exchange Notes. The investigation is regarding whether customers received unsuitable recommendations of the ATP Notes from their full service brokerage firm or advisor.

Reportedly, a class action lawsuit was filed on May 24, 2013, on behalf of investors who acquired ATP Notes that can be traced to the company’s exchange of $1.6 billion in notes that occurred on December 16, 2010. According to the complaint, the company allegedly concealed two moratoriums while issuing the ATP Notes. These moratoriums were issued by the U.S. Department of Interior and regarded deep water drilling. Reportedly, the drilling devastated the revenues of the company, which filed for bankruptcy on August 17, 2012.

According to stock fraud lawyers, ATP Oil and Gas 11.875 Percent Senior Second Lien Exchange Notes were speculative investments that carried a very high risk. As a result, they were not suitable for investors with conservative portfolios, low risk tolerances or those seeking fixed income.

Published on: July 11, 2013

Steadfast Income REIT Investors Could Recover Losses

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of Steadfast Income REIT investors. On June 28, 2013, Steadfast Income REIT Inc. was issued a cease-and-desist order by the Ohio Division of Securities for the announcement of price changes for the REIT 59 days before they took effect.

According to the order, “Steadfast’s decision to publicly announce an offering price increase 59 days prior to implementation of the price increase created a sale period that may have artificially increased investor demand for its securities.” The cease-and-desist order only orders a halt in the valuation price and does not stop sales of the Steadfast Income REIT.

On July 12, 2012, an estimated per share value of $10.24 was disclosed for the Steadfast Income REIT. However, securities arbitration lawyers say that the REIT continued to sell at the lower, $10 per share value until September 10, 2012. Reportedly, the announcement of a future valuation change harms shareholders by undercutting the investment’s current value.

Published on: June 25, 2013

Customers of Wendy J. Worchester, TNP Securities Could Recover Losses

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of the customers of Wendy J. Worchester and TNP Securities LLC. According to a recent article in InvestmentNews, Tony Thompson’s non-traded REIT, or real estate investment trust, was suspended by the Financial Industry Regulatory Authority for five months because of a failure to conduct independent and adequate due diligence.

Worchester was the co-chief compliance officer of TNP Securities LLC, a broker-dealer under Thompson’s control. Worchester and TNP Securities were suspended from working with a FINRA affiliated broker-dealer and Worchester was fined $15,000. According to FINRA, Worchester’s failure in due diligence was regarding three TNP Securities-sponsored private placement offerings.

According to stock fraud lawyers, TNP suffered almost $25.8 million in losses in 2009, resulting in negative $13.6 million net equity while launching the TNP Strategic Retail Trust Inc., a REIT. Allegedly, both of the note programs and two of the private placements offered by Thompson used new investor money to pay old investors. Both note programs are now in default.

Published on: June 11, 2013

ProEquities Investors Could Recover Losses for Inappropriate Sale of Non-traded REITs

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of customers of ProEquities Inc. Allegedly, ProEquities has engaged in the inappropriate sale of speculative and illiquid investments, including non-traded REITs.

ProEquities Investors Could Recover Losses for Inappropriate Sale of Non-traded REITs

In one recent claim, a couple from Minnesota read an ad in the newspaper that reportedly contained the words “Retirement” and “Safe.” After reading this ad, they attended a seminar, during which an advisor for ProEquities reportedly used the catchphrases “no stock market risk” and “retirement income – net of fees and expenses.” He allegedly emphasized investments that supposedly avoided exposure to the stock market and risk.

Following the seminar, stock fraud lawyers say the couple followed the advice of the advisor. They invested the majority of their savings according to the ProEquities advisor’s ongoing advice. The investments they made turned out to be highly speculative and illiquid non-traded REITs. ProEquities sold the couple the following products: Behringer Harvard Multifamily REIT I, Behringer Harvard REIT I, ATEL Growth Capital Fund III and LEAF Equipment Leasing Income Fund III.

Published on: June 4, 2013

Non-traded REITs: Five Firms to Pay $7 Million in Massachusetts Settlement

by InvestorLawyers

On May 22, 2013, secretary of the Commonwealth of Massachusetts William Galvin announced settlements with five major independent broker-dealers. According to the settlements, Ameriprise Financial Services Inc. will pay $2.6 million in restitution to investors and a $400,000 fine, Commonwealth Financial Network will pay restitution of $2.1 million and a fine of $300,000, Royal Alliance Associates Inc. will pay restitution of $59,000 and a fine of $25,000, Securities America Inc. will pay restitution of $778,000 and a fine of $150,000 and Lincoln Financial Advisors Corp. will pay restitution of $504,000 and a fine of $100,000. Securities fraud attorneys are currently investigating claims on behalf of investors who purchased Real Estate Investment Trusts (REITs) from these or any other independent broker-dealers.

Non-traded REITs: Five Firms to Pay $7 Million in Massachusetts Settlement

According to a statement made by Mr. Galvin, “Our investigation into the sales of REITs, triggered by investor complaints, showed a pattern of impropriety on the sales of these popular but risky investments on the part of independent brokerage firms where supervision has historically been difficult to monitor.”

According to stock fraud lawyers, this settlement follows the February decision in which LPL Financial LLC was required to pay restitution to investors of $2 million and fines totaling $500,000 regarding non-traded REIT sales.

Published on: May 28, 2013

American Capital Agency, American Capital Mortgage REIT Investors Could Recover Losses

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses in two mortgage REITs, American Capital Agency and American Capital Mortgage, following the announcement of 2013 first-quarter results. For the first quarter of 2013, American Capital Mortgage suffered losses of $0.56 per share and American Capital Agency suffered losses of $1.57 per share.

American Capital Agency, American Capital Mortgage REIT Investors Could Recover Losses

Reportedly, these losses are a result of increasing interest rates combined with a drop in mortgage-backed securities values and the secondary offering’s failure to foresee these changes. However, mortgage REITs, or real estate investment trusts, are not suitable for all investors. Prior to recommending an investment to a client, brokers and firms are required to perform the necessary due diligence to establish whether the investment is suitable for the client, given their age, investment objectives and risk tolerance.

Financial Industry Regulatory Authority rules have established that firms have an obligation to fully disclose all the risks of a given investment when making recommendations. Furthermore, securities arbitration lawyers say brokerage firms must, before approving an investment’s sale to a customer, conduct a reasonable investigation of the securities and issuer.