Inland Securities Censured and Fined $40k on Two REIT Investments, in Conjunction with Alleged Failure to Invoke Adequate Supervisory Procedures
Between July 2009 and August 2014, Inland Securities, of Oak Brook, Illinois, did not perform due diligence on the offerings for which it served as placement agent, according to a FINRA letter of Acceptance, Waiver and Consent (AWC). In addition, Inland Securities, the exclusive dealer-manager of private placements and non-traded REITS sponsored by its affiliates, did not stipulate which registered principals would perform certain supervisory duties, FINRA alleges.
Breach of Inland’s Own Written Protocol
From July 2009 until August 2014, Inland Securities‘ written procedures stated that “[s]ales of DPP or REITs may be made only if programs have been officially approved by [Inland Securities]. Due Diligence research will be performed by Home Office personnel, and approved or disapproved for sale by the President.” However, the firm’s procedures did not firmly indicate which persons were responsible for performing said research, or which steps would be taken to perform the due diligence, or how such actions would be recorded, FINRA notes.
Further Breach of Protocol on $11 million Deals
The AWC further claims that Inland Securities also declined to follow protocol related to two private placements that each raised approximately $11 million, respectively, in conjunction with finance commercial real estate acquisitions. Inland Securities also kept a placement agent fee of 1.4% of the gross offering proceeds.
Inland Concedes to the Following Sanctions
Inland Securities has agreed to a censure, to pay a fine of $40,000, and to proceed with an independent consultant which will revise and maintain its written supervisory procedures.
Investment Fraud Lawyers Investigating Inland Securities
The Peiffer Rosca securities attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting victims with the recovery of their losses. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.
Investors who believe they lost money as a result of investment fraud or misconduct may contact the securities lawyers at Peiffer Rosca, Jason Kane or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at (585) 310-5140.