The Securities Arbitration Law Firm of KlaymanToskes announced today that it is investigating the sales practices and due diligence of Financial Industry Regulatory Authority (“FINRA”) securities broker-dealers who solicited customers to invest in Geneva Organization Tenant-in-Common Investments.
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. Broker-dealers may have improperly recommended Geneva Organization TIC investments, however, to their customers. Specifically, these TIC investments granted investors interests in One Southwest Crossing, a building in Eden Prairie.
Over the past decade, TIC investments became increasingly more common. In 2003, the IRS amended its rules which allowed investors to avoid capital gains taxes by investing proceeds from a property sale into TIC investments. Individuals who invest in TICs become fractional owners of a single property. When the real estate market crashed, many TIC investors saw the value of their investments decline substantially.
FINRA securities brokerage firms who sold TIC investments to their customers were required to conduct adequate due diligence into the investments before selling the products. Financial advisors who sold TIC investments often represented the products as safe and guaranteed, with returns of 7 to 12 percent per year. With the recommendation to invest in the TICs, however, many advisors failed to properly advise their customers of the risks associated with the products.
Earlier this year, a FINRA Arbitration Panel ordered LPL Financial to pay two investors about $1.4 million for losses sustained in two TIC exchanges Heron Cove, LLC and Braintree Park, LLC. The sponsor of the two deals was Direct Invest, LLC. LPL was also held responsible for $35,700 in hearing session fees.
Investors who purchased Geneva Organization Tenant-in-Common Investments from a full-service securities broker-dealer and sustained significant losses can contact KlaymanToskes to explore their legal rights and options. The attorneys at KlaymanToskes are dedicated to pursuing claims on behalf of investors who have suffered investment losses. KlaymanToskes, an experienced, qualified and nationally recognized securities litigation law firm, practices exclusively in the field of securities arbitration and litigation. It continues its representation of investors throughout the world in securities arbitration and litigation matters against major Wall Street brokerage firms.
If you have information relating to this investigation or have investment losses of $100,000 or more in TIC securities, please contact KlaymanToskes, at 888-997-9956.