UNLOCK THE POWER OF THE VAULT

One Bad Apple Doesn’t Always Spoil the Whole Bunch

October 23, 2012

Nontraded REITs continue to get a bad reputation as a result of fines and sanctions like the one just handed down by FINRA against David Lerner Associates.  On the whole however, sponsors of nontraded REITs and the broker/dealers that distribute them are among the most highly regulated groups operating in the securities industry today.

For example, the disclosure in the FINRA press release that states David Lerner Associates is required to file all advertisements and sales literature with FINRA at least 10 days prior to use is not unusual, but rather, part of a standard operating procedure for all nontraded REIT sponsors.  In addition to filing sales literature with FINRA, nontraded REITs are also required to file communications to financial intermediaries and investors with the SEC and certain state regulatory agencies prior to use.  This process gives the SEC and the state regulators the opportunity to provide comments, scrutinize word choices and verify data sources before the sales literature is ever distributed to the public.

As an industry observer, we feel it is important to address misperceptions, demystify the industry and provide ongoing education about the nontraded REIT market.  To that end, the communications we provide are regularly obtained through SEC filings and other public sources in an effort to continuously foster transparency.

Print Friendly, PDF & Email
Go Back
default image

Blue Vault helps me to stay well informed on the financial status of both open and closed nontraded REITs and BDCs, so that I can help my clients better understand the product, before they make the decision to invest and after.

Ramón A. Rivera-Ramos Registered Principal, Kovack Securities, Inc. Blue Vault Nontraded REIT and Nontraded BDC Reviews September 1, 2016