Securities Lawyers Blog
The investment attorneys at Gana Weinstein LLP are interested in speaking with investors of broker Tomas Velken (Velken). According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Velken has been the subject of at least 14 customer complaints. The customer complaints against Velken allege securities law violations that including unsuitable investments, misrepresentations, and breach of fiduciary duty among other claims. Many of the complaints appear to be in connection with in connection with the sales of tenants-in-common (TICs).
The most recent complaint was filed in September 2015, and alleged $115,000 in losses due to a recommendation to invest in a real estate security transaction purchased in 2007. Another investor in April 2015, claimed $1,777,484 in damages due to a real estate security transactions purchased from 2005 through 2007. In March 2015, another investor alleged that in 2010 the broker made misrepresentations concerning an investment’s performance and claimed damages of $592,600.
As a background, TICs largely been sold unfairly as tax advantaged products that allow customers to defer capital gains taxes on appreciated real estate. TICs are private placements that have no secondary trading market and are therefore illiquid investments. In a typical TIC, the investor receives a fractional interest in the property along with other stakeholders and the profits are generated mostly through the efforts of the sponsor and the management company that manages and leases the property. The sponsor typically structures the TIC investment with up-front fees and expenses charged to the TIC and negotiates the sale price and loan for the acquired property. Because these fees are often higher than 15%, there is often no way for the investment to be profitable for the investor.