FINRA Cracks Down on Seller of Non-Traded REITs
The Financial Industry Regulatory Authority (FINRA) is cracking down on Wells Investment Securities, Incorporated, one of the biggest peddlers of non-traded REITs, according to an article in Investment News. Wells Real Estate Funds, Inc. is one of the largest sponsors of investments in the non-traded REIT industry, with $11 billion in assets and 250,000 investors. According to filings with the SEC, Wells Timberland REIT, Inc. said that FINRA had notified Wells Investment Securities, Inc. about its decision to recommend disciplinary action. Previously, the NASD had sanctioned Wells Investment Services back in 2003 for improperly rewarding broker dealer representatives who sold the company’s REITs, with lavish entertainment and trips.
Wells’ REITs are very popular with independent broker dealers and Wells has as many as 200 selling agreements with firms across the country. Another product offered by independent broker dealers is the Wells Core Office Income REIT, Incorporated. Many times these non-traded REITs were peddled to elderly, retired and conservative investors who could not afford the risks and losses associated with these investments, especially where the majority of their investable assets were concentrated in these products.
If you have suffered losses from investing in illiquid non-traded REITs, please contact our securities law firm for a confidential, no obligation consultation at 1-800-259-9010.