FINRA Warns Brokers Against Misleading REIT Marketing

Law360, New York (May 3, 2013, 3:39 PM EDT) -- The Financial Industry Regulatory Authority issued a new set of guidelines Thursday for how brokerage firms should present the risks and rewards of real estate investment trusts and direct participation programs, noting a recent spike in misleading marketing.

FINRA already has rules that require brokers to avoid being misleading when presenting investment opportunities in REITs and DRRs, but the agency said a recent review of communications between brokers and the public showed a troubling number of inaccuracies.

“[S]ome communications have contained inaccurate or misleading statements regarding the potential benefits of investing in real estate programs,” FINRA said in a regulatory filing....

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