HOUSTON, Aug. 3, 2011 (GLOBE NEWSWIRE) -- The Securities Law Firm of Shepherd Smith Edwards & Kantas LLP, www.sseklaw.com, is currently investigating claims on behalf of investors who suffered losses in Apple Real Estate Investment Trusts (REITs) sold by David Lerner Associates. The Financial Industry Regulatory Authority (FINRA) has filed a complaint against David Lerner Associates out of Syosset, NY for soliciting investors to purchase shares of Apple REIT Ten, a non-traded $2 billion Real Estate Investment Trust, without conducting a reasonable investigation to determine whether it was suitable for investors. Additionally, FINRA has complained that David Lerner Associates was providing misleading information on its website regarding Apple REIT Ten distributions. According to FINRA, David Lerner Associates has sold and continues to sell Apple REIT Ten targeting unsophisticated and elderly investors with unsuitable sales of the illiquid security.
Since January 2011, as sole underwriter for Apple REIT Ten, David Lerner Associates has sold over $300 million of an open $2 billion offering of the REIT's shares. Apple REIT Ten invests in the same extended stay hotel properties as a series of other Apple REITs closed to investors. Apple REIT Ten and the closed Apple REITs were founded by the same individual, and are all under common management. David Lerner Associates has been the sole underwriter for Apple REITs since 1992, selling nearly $6.8 billion of the securities into approximately 122,600 David Lerner Associates' customer accounts.
The complaint against DLA alleges that since at least 2004, the closed Apple REITs have unreasonably valued their shares at a constant price of $11 notwithstanding market fluctuations, performance declines and increased leverage, while maintaining outsized distributions of 7 to 8 percent by leveraging the REITs through borrowings and returning capital to investors. As sole distributor, DLA did not question the Apple REITs' unchanging valuations despite the economic downturn for commercial real estate.
Shepherd Smith Edwards & Kantas LLP has a team of attorneys, consultants and staff with more than 100 years of combined experience in the securities industry and in securities law. Since 1990, we have represented thousands of investors nationwide to recover losses. We have represented clients in Federal and State courts and in arbitration through the Financial Industry Regulatory Authority (FINRA), the New York Stock Exchange Inc. (NYSE), the American Arbitration Association (AAA) and in private arbitration actions. Collectively, we have represented over 1,000 investors over the last 18 years in negotiation, mediation, arbitration and litigation.