Wolper Law Firm Files An Arbitration Claim Against Securities Service Network And LPL Financial Based On The Sale Of An Overconcentrated Portfolio Of REIT Investments By Financial Advisor Adam Lunceford

• October 13, 2019
• LPL Financial
• Securities Service Network

Adam Lunceford (CRD # 4686499) is currently a Financial Advisor at LPL Financial In Scottsdale, Arizona.  Adam Lunceford has been in the securities industry since 2003 and previously worked at Securities Service Network. 

The Wolper Law Firm has filed an arbitration claim before the Financial Industry Regulatory Authority (FINRA) on behalf of a sixty-four year old on the cusp of retirement, who was sold an over-concentrated portfolio of high commission Non-Traded Real Estate Investment Trusts (“Non-Traded REITs”) by Financial Advisor Adam Lunceford. 

Non-traded REITs are securities that do not trade on a public securities exchange.  For this reason, non-traded REITs can be illiquid.  The underlying collateral of the REITs consists of income producing residential or commercial real estate.  Typically, the commissions generated on non-traded REITs are higher than industry norm (approx. 7%), and the investments themselves may be subject to extreme volatility due to associated risk factors.  Non-traded REITs are only suitable for investors with a long-term investment horizon who are willing to accept higher levels of risk in their investments. 

According to the Statement of Claim, Adam Lunceford recommended that Claimant invest approximately 80% of his IRA in high commission, illiquid and speculative Non-Traded REITs in direct contrast to Claimant’s stated objectives.  Specifically, Adam Lunceford recommended that Claimant invest $400,000 in the American Realty Capital Trust V (“ARC V”) and $400,000 in Griffin American Healthcare REIT II (“Griffin II”).  It is believed that Adam Lunceford earned commissions of nearly $60,000 in one day on these two trades alone.  Importantly, had Adam Lunceford recommended an appropriate, well-diversified portfolio, it would have taken him approximately five years to earn the same commission. 

The value of the customers’ Non-Traded REITs has plummeted and not longer pay income.  The arbitration seeks damages of at least $250,000 and remains pending. 

Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients.  To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.   

The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis.  Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities.  Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters.  We can be reached at 800.931.8452 or by email at mwolper@wolperlawfirm.com.