FINRA Fines 6 Brokerage Firms for Improper REIT Sales

FINRA has fined Voya Financial Advisors Inc., Transamerica Financial Advisors Inc., and four other independent brokerage firms for failing to give clients appropriate discounts on sales of non-traded real estate investment trusts (REITs) and business development companies (BDCs). FINRA fined the firms a total of more than $500,000 in July and August.

Discounts are supposed to be provided to purchasers of certain non-traded REITs when the amount of the purchase exceeds a certain dollar amount, typically $500,000. The discounted price also would be accompanied by a lower commission paid to the broker.

FINRA found that the brokerage firms “failed to identify and apply volume discounts to certain customers' eligible purchases of non-traded REITs and BDCs, resulting in customers paying excessive sales charges,” In addition to the fines, the brokerage firms also were required to pay restitution to clients who were overcharged. FINRA found that the misconduct took place starting in 2009 and continuing through 2014.

The two largest fines were $325,000 for Voya and $85,000 for Transamerica. Voya also was ordered to pay $42,000 in restitution, while Transamerica was ordered to pay restitution of $51,000. The other brokerage firms, fines and client restitution included: Investacorp Inc., $50,000 and $27,400; J.P. Turner & Co., $45,000 and $21,200; National Planning Corp., $30,000 and $16,400; and Cetera Investment Services, $30,000 and $17,900.

If you lost money in a REIT or a business development company sold to you by Voya, Transamerica, Investacorp Inc., J.P. Turner & Co., National Planning Corp., Cetera Investment Services, or any other brokerage firm, contact a stockbroker negligence lawyer to discuss your rights.

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