Boca Raton, Florida (BUSINESSWIRE) – February 26, 2016 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, launches an investigation into Financial Industry Regulatory Authority (“FINRA”) sales practice violations of brokerage firms related to United Development Funding IV (“UDF”) Non-Traded REIT and Initial Public Offering. In 2013, UDF was financed through a non-traded REIT Offering distributed through RCS Capital Corp, a division of Realty Capital Securities, LLC, as the dealer manager of a syndication of broker dealers. On January 31, 2016, RCS Capital Corp filed for bankruptcy protection (Case No. 16-10223, U.S. Bankruptcy Court, District of Delaware). United Development Funding IV shares (NASDAQ:UDF) have not traded since February 18, 2016.
According to securities attorney, Steven D. Toskes, Esq., “Broker dealer members of the syndication were compensated through fee arrangements and responsible to conduct adequate due diligence. The substantial compensation paid to financial advisors to recommend United Development Funding IV, non-traded REIT Offering, may have led to unsuitable advice due to conflicts of interest.” Mr. Toskes explains, “Investors in United Development Funding IV after the Initial Public Offering (“IPO”) represent different circumstances for investor claims for damages.” In any instance, FINRA sales practice rules require adequate due diligence with fair and balanced representations to investors concerning risks.
K&T’s investigation concerns brokerage firms sales practices violations related to investments in UDF through participation in the non-traded REIT Offering and the subsequent IPO. Brokerage firm violations of FINRA sales practice rules may include misrepresentations and omissions of material facts, conflicts of interest, unsuitable investment advice, securities concentration or the failure to supervise its financial advisors.
About Klayman & Toskes, P.A.
K&T is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors such as non-profit organizations, public and multi-employer pension funds in large and complex securities matters. K&T has office locations in California, Florida, New York and Puerto Rico. Investors who have knowledge, experience or questions related to the sales practices of brokerage firms and its financial advisors’ concerning UDF, may contact Steven D. Toskes, Esq. at 888-997-9956.