Miami, Florida FINRA Arbitration Panel Holds Broker and Brokerage Firm Liable in REIT Claim
On September 20th, 2019, the Financial Industry Regulatory Authority (FINRA) Office of Dispute Resolution announced a $43,827 arbitration award for two Florida investors (Case Number: 17-03139). The respondents in this case were Raymond James & Associates, Morgan Keegan & Company, and Coral Gables-based financial advisor Ruben Frezzoti (CRD#: 4439983). Though, notably, Morgan Keegan was excused from liability.
Investment Losses in a Real Estate Investment Trust (REIT)
The underlying dispute in this case involved investments in a real estate investment trust (REIT). In bringing the legal claim, the Florida investors raised several different specific causes of action against the broker-dealers and the financial advisor, including:
- Broker negligence;
- Breach of fiduciary duty;
- Violation of Florida’s Blue Sky laws;
- Violation of state Adult Protective Services laws;
- Material misrepresentations and material omissions; and
- Unsuitable investment recommendations.
After reviewing the evidence submitted by the claimants (investors) and the affirmative defenses raised by the brokerage firms and the financial advisor, the Florida FINRA arbitration panel ruled in favor of the investors — holding Raymond James and Associates and Ruben Frezzoti jointly and severally liable for $43,827 in financial damages.
REITs are Unsuitable for Most Investors
A real estate investment trust is a complex and potentially risk type of financial product. Essentially, an REIT is an entity that owns a portfolio of income-producing real estate properties. For example, REITs often own properties such as apartment buildings, hotels & motels, office buildings, nursing homes, and much more. Though, REITs are structured in many different ways. In some cases, a non-traded REIT may only hold a single commercial property. In other cases, an REIT may hold diversified collection of real estate. For a number of different reasons, REITs are simply not suitable for the majority of investors. Specifically, real estate investment trusts:
- Often include significant upfront costs and fees;
- Can be difficult to understand for investors who are not familiar;
- Are frequently illiquid investments; and
- Carry a risk of significant financial losses.
Under securities industry regulations, financial advisors have a professional duty to recommend suitable investments to their customers. In determining what types of financial products and investment opportunities are suitable, financial advisors should consider a customer’s individual profile. This includes their financial objectives, investment experience, and level of risk tolerance. If you suffered financial losses in an unsuitable REIT or any other type of unsuitable investment, you may be eligible to recover financial compensation through a FINRA arbitration claim. Call an attorney for immediate assistance.
Discuss Your FINRA Claim With Our Miami, FL Unsuitable Investment Claims Lawyers Today
At Carlson & Associates, P.A., our Miami investment fraud attorneys represent investors in legal claims against financial advisors and brokerage firms in Florida. If you suffered losses in a real estate investment trust (REIT) or any other type of unsuitable financial products, our legal team is here to help. From our office in Miami, we serve clients throughout South Florida.
Resources:
brokercheck.finra.org/individual/summary/4439983
finra.org/sites/default/files/aao_documents/17-03139.pdf
https://www.carlson-law.net/summit-brokerage-services-censured-fined-40000-for-failure-to-supervise/
