LPL Financial Hit With $1.4 Million Award
Last week, a Financial Industry Regulatory Authority (“FINRA”) arbitration panel awarded an elderly California couple $1.4 million for losses in two tenant-in-common (“TIC”) investments. TICs are a form of real estate ownership in which two or more parties have a fractional interest in the property.
According to the investors’ lawyer, LPL Financial, LLC (“LPL”) knew that the TICs boosted their yield with financial “tricks.” In their FINRA complaint, investors Heinrich and Araceli Hardt alleged that LPL committed securities fraud, made material misrepresentations and committed elder abuse, among other things. They had sought $8 million in damages.
According to the arbitration testimony, the TICs at issue, Heron Cove, LLC and Braintree Park, LLC, promised investors monthly income checks, purportedly generated by income-producing properties. According to the Hardts’ attorney, LPL knew that the Heron Cove, LLC and Braintree Park, LLC properties were not producing any natural cash flow and, after a couple of years, the money ran out.
In addition to the FINRA arbitration matter, the Hardts filed a federal lawsuit against the sponsor of the deals, Direct Invest LLC. The pleadings filed in the pending lawsuit claim that the offering documents for the TICs contained multiple false and misleading statements regarding the property manager, projected cash flows, appreciation potential, superiority of property location, current and projected conditions for the Boston office market, strength of the leases, and use of the investment proceeds.
Investors nationwide who suffered a loss as a result of a tenant-in-common investment purchased through a FINRA member firm, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at Rabin Kammerer Johnson for a free and confidential consultation by calling toll free at 877.915.4040.