Mike Madriaga 9 a.m., July 25
Non-traded REITs -- again
LPL Financial charged with violations by Massachusetts official
According to the Boston Business Journal, San Diego-based LPL Financial has been charged with dishonest business practices by Secretary of the Commonwealth William Galvin. An administrative complaint was filed against the firm December 12, and Galvin seeks a cease-and-desist order against LPL, censure, and full restitution for investors, according to the publication. LPL employees sold $28 million in non-traded Real Estate Investment Trusts (REITs) and collected $1.8 million in fees, said Galvin. This exceeded Massachusetts law limiting investor exposure to non-traded REITs to 10%. Non-traded REITs, as revealed in several Reader articles I have done, lack liquidity, and bring huge commissions to brokers. LPL says Galvin's claims are "substantially overstated. LPL Financial takes protection of investors' interests seriously."