Investigation into David Lerner Associates Proprietary Products: Energy 11 LP, Energy 12 LP, and Spirit of America Fund
In November 2020, KlaymanToskes launched an investigation into whether, David Lerner Associates failed to supervise the sales and marketing of its proprietary products to risk averse investors, such as retirees or other conservative investors, that were seeking income and capital preservation. Furthermore, the investigation focuses on whether David Lerner Associates and its financial advisors misrepresented material facts relating to the risks associated with illiquid, concentrated investments in the Oil & Energy sector and the associated higher fees and costs. The concentrated investments include the Energy 11 LP, Energy Resource 12 LP, and Spirit of America Fund (NASDAQ:SOAEX). In addition to the precipitous loss in value, most of the interest payments received by investors are now considered return of capital. This investigation has been ongoing.
KlaymanToskes Filed a $1,000,000 Investor Claim seeking more than $1,000,000 on Behalf of an Investor who Purchased Spirit of America Fund
In February 2021, KlaymanToskes filed a Claim on behalf of a David Lerner investor who was seeking to preserve his investment principal, while earning supplemental income to provide for his growing family, including his children’s educations and other future needs. As part of the strategy implemented by David Lerner, the investor was recommended to concentrate his entire account in a single investment, the Spirit of America Fund. In addition, the investor was unaware that this fund, like the other proprietary David Lerner funds, contained high commissions (up to 10%), which incentivized financial advisors to recommend these products. Ultimately, due to the unsuitable strategy, the investor has lost more than $1,000,000 in investment principal.
David Lerner’s Proprietary Products Were Built to Incentivize Recommendations to the Detriment of Investors
According to securities attorney, Lawrence L. Klayman, “David Lerner Associates recommended proprietary products that were unsuitable for most conservative or retired investors.” According to the Energy 11 LP and Energy Resource 12 LP Prospectus and the Partnership Agreement with the Managing Dealer, the Managing Dealer receives a total of 6% in selling commissions and Dealer Manager Incentive Fees of an amount up to 4% of the gross proceeds of the common units sold based on the Partnership’s performance. Klayman adds, “Based on SEC Filings there was an incentive to recommend these proprietary products at the expense of investors.”
Continued Investigations and Legal Support
If you held accounts with David Lerner and were recommended a trading strategy involving a concentration in the Spirit of America Fund and/or were solicited to invest in other high commission proprietary products through David Lerner Assiciates, and you have information relating to the management and supervision of your accounts, you are encouraged to contact Lawrence L. Klayman, Esq., at (561) 542-5131, and download our Special Investor Report.
About Klayman Toskes
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm represents high net-worth, ultra-high-net-worth, and institutional investors, such as non-profit organizations, unions, public and multi-employer pension funds. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
Contact
KlaymanToskes
Lawrence L. Klayman, Esq.
(561) 542-5131
lklayman@klaymantoskes.com
www.klaymantoskes.com