'Take A Tip From Poppy' Firm Sued Over $6.8B In REITs
The “Take a tip from Poppy” firm, David Lerner Associates Incorporated, out of Syosett, NY has been sued by investors who feel they were duped in the sale and underwriting of over $6.8 billion Apple Real Estate Investment Trusts (REITs), according to Bloomberg. The “Take a tip from Poppy” advertising slogan has been used by the 35 year old firm, which has underwritten Apple REITs for 19 years.
Lerner Associates has reaped the rewards of over $600 million in fees and commissions over the last 7 years, while five Apple REITs made over $6 billion in proceeds. According to the complaint, the firm marketed and sold the REITs as being suitable for conservative investors and advertised that they had never lost money by investing in hotels. It further alleged that the REITs failed to disclose that they were not generating enough income from operations and that investors were being paid with their own money.
In related matters, FINRA has recently accused Lerner Associates of overcharging customers on sales of municipal bonds and mortgage securities. In 2004, they were fined by NASD for having sales contests to promote proprietary mutual funds and variable annuities. In 2005, they were fined for exaggerating the firm’s investment record in advertisements and in 2006 they were fined $400,000 for violating disclosure rules regarding the sale of variable annuities.