TIC Tag Archives — Investor Lawyers Blog

Securities fraud attorneys are currently investigating claims on behalf of investors who have suffered significant losses as a result of their investment in a Geneva Organization tenant-in-common, or TIC.

Geneva Organization TIC Investors Could Recover Losses

A real estate investment company founded by Duane Lund in 2003, the Geneva Organization specializes in pooling individual investors into larger groups to buy commercial real estate. According to investment fraud lawyers, many broker-dealers’ may have improperly recommended Geneva Organization TIC investments to investors. Specifically, these TIC investments granted investors interests in One Southwest Crossing, a building in Eden Prairie.

TICs are complicated deals that allow real estate sellers to avoid capital-gains tax by rolling their proceeds into other properties, receive a regular income from the investment — and, in the event of the investor’s death, the asset can be bequeathed to heirs. TICs are also known as 1031 exchanges and, despite these attractive benefits, they are not appropriate for many investors but, rather, are only suitable for some specialized clients.

Securities arbitration lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of their investment in TIC, or tenants-in-common, investments with a full-service brokerage firm. The securities industry has watched as TICs have become more common as a result of the IRS rules amendment in 2003, allowing an avoidance in capital gains taxes to investors who invested their property sale proceeds into TIC investments.

TIC Investor Losses Could be Recovered in FINRA Arbitration

According to stock fraud lawyers, following the crash of the real estate market, many TIC investors, as fractional owners in a single property, saw a significant decline in the value of their investment. However, because of the sales practices of some FINRA registered brokerage firms, some of these investors may be able to recover losses through securities arbitration. These products were often represented as “guaranteed” and/or “safe” investments that would return between 7 and 12 percent each year. However, in many cases, investors were not properly advised on the risks associated with TIC investments.

A Financial Industry Regulatory Authority panel has already ordered one firm, LPL Financial, to reimburse investor losses amounting to $1.4 million in Braintree Park LLC and Heron Cove LLC. These two TICs were sponsored by Direct Invest LLC.