CHICAGO, June 1, 2011 (GLOBE NEWSWIRE) -- Attorney David Neuman announces his law firm filed multiple arbitration claims on behalf of clients of David Lerner Associates (DLA). The clients were purchasers of Apple non-traded REITs recommended to them by DLA. The Apple REITs primarily invest in extended stay hotel properties. DLA has been the sole underwriter for Apple REITs since 1992, selling nearly $6.8 billion of the securities to approximately 122,600 DLA customer accounts.
It is alleged the massive fees and commissions of the Apple REITs were what caused the investments to be recommended to the clients rather than the clients' best interests. DLA earned 10 percent of all offerings of Apple REIT securities as well as other fees. Apple REIT sales have generated $600 million for DLA, accounting for 60 to 70 percent of DLA's business annually since 1996.
According to the filed Statement of Claims, the Apple REITs have unreasonably valued their shares at a constant price of $11 notwithstanding market fluctuations, performance declines and increased leverage, while maintaining outsized distributions of 7 to 8 percent by leveraging the REITs through borrowings and returning capital to investors. As sole distributor, DLA did not question the Apple REITs' unchanging valuations despite the economic downturn for commercial real estate.
According to Mr. Neuman, the DLA financial advisors who recommended the REITs are not the target of the FINRA arbitration claims filed by his office. According to Mr. Neuman: "We believe the David Lerner Associates financial advisors were misled by the firm, and we are not naming them in the Statement of Claims. In addition, we encourage former DLA financial advisors to contact our firm with any information they may have about the firm's sales practices."
The recently filed enforcement action against David Lerner Associated by FINRA Enforcement should also be helpful for clients of DLA. According to Mr. Neuman: "The FINRA Enforcement action mirrors many of the allegations we made against DLA in our previously filed Statement of Claims. FINRA's action should be useful in helping clients recover their investment losses in Apple non-traded REITs against DLA."
According to the Statement of Claim, the clients were unsophisticated and were of limited financial means. The clients were repeatedly told the Apple non-traded REITs were "safe and secure" and "would not lose money." Claims against the firm as alleged in the Statement of Claim include fraud, misrepresentations and omissions, suitability claims and breach of fiduciary duty. In addition to compensatory damages, the Statement of Claim also request attorney fees, costs, and punitive damages. Purchasers of Apple REITs are encouraged to review for more information.
CONTACT: David Neuman Esq. o: 312-332-4200 10 S. LaSalle, 35th Floor Chicago, IL 60603 www.RecoverDavidLernerLosses.com