Apple REIT Class Action Lawsuits Filed Against David Lerner Associates

Investors who purchased Apple Real Estate Investment Trust shares (REITs) sold by David Lerner & Associates Inc. (DLA) have filed a class action lawsuit in an effort to recover to recover their losses. 

At least two Apple REIT class action lawsuits have been filed in federal courts in Brooklyn and New Jersey, both claiming that many investors were victims of financial fraud perpetrated by David Lerner & Associates and Apple REIT. The complaints seek class action status to represent all investors who incurred losses due to investments in the Apple REITs.

In addition to the class action claims, a number of individual investor arbitration lawsuits have been filed through the Financial Industry Regulatory Authority (FINRA), which has also filed charges against David Lerner Associates, accusing the company of targeting elderly and unsophisticated investors to sell them Apple REITs so that they could collect lucrative commissions.

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Investor claims against the firm include allegations of fraud, misrepresentations and omissions, suitability and breach of fiduciary duty. The investors are seeking compensatory damages, attorney fees, costs and punitive damages.

FINRA has claimed that the shares were sold with little or no consideration for the welfare of the investors. The authority also claims that David Lerner Associates failed to question why Apple REIT Ten unreasonably valued the shares at a constant price of $11, regardless of market fluctuations or actual performance, even during the rough economic times rocking the real estate industry.

FINRA is a non-governmental regulatory body that handles the resolution of disputes between investors and stockbrokers and other financial firms. It was created in July 2007 as a successor to the National Association of Securities Dealers, to arbitrate stock broker fraud claims that can include charges of breach of contract, breach of fiduciary duty, negligence, misrepresentation, unauthorized trading and other claims that investments were improperly handled.

Although the David Lerner & Associates class action lawsuits over Apple REIT seek to represent all investors, individuals may elect to pursue a separate arbitration claim instead of participating in the class action. Financial fraud lawyers often advise that investors are in a better position to recover their losses quicker through a broker arbitration claim, as opposed to the lengthy class action process.

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18 Comments

  • EdMay 22, 2015 at 10:23 pm

    I am one who has suffered losses with D Lerner. There is a high turn over rate with their associates.One broker told me one thing and quit . Now they say what he said wasn't true . Take the loss and move along. Ten years for that ! You want to make a little money?Invest alot with David Lerner !

  • GwendolynApril 18, 2013 at 4:39 pm

    I own shares in APPLE REIT 6 which is currently in the process of being sold to a company called Blackstone. My dividend income has been suspended since November 2012, to the present, while negoiations are taking place.. My question is who benefited from my dividend income? and will there be a retroactive payment of dividend income to my account if Blackstone acquires REIT 6?

  • AngeloJanuary 28, 2013 at 2:12 pm

    I think that David Lerner should be supervised and make sure that they don't take off with investors money and let them due business as husual and take some of that profit and start paying investors off. At the time of sales of the reits the investors should get paid fully including interest. At this time I don't know if they are been supervised or not and I fill that not supervised they could sal[Show More]I think that David Lerner should be supervised and make sure that they don't take off with investors money and let them due business as husual and take some of that profit and start paying investors off. At the time of sales of the reits the investors should get paid fully including interest. At this time I don't know if they are been supervised or not and I fill that not supervised they could sale all the assets and take off. The property in the reits is the only the only garanty that the investors have. It is unfortunaly for all of us that the value of the property is gone low.

  • AnthonyJanuary 10, 2013 at 12:01 pm

    I know people who have money invested with DL. Is it true that 10% is taken off the top for fees?

  • AvyDecember 4, 2012 at 3:51 pm

    I am unemployed and have been trying to get my money from DLerner since July,2012 to pay my portion of mother's funeral bill, my student loans and keep a roof over my head. Got the application to complete which I did then got a whole set of forms and I was told I have to sign when I refuse I was told unless I sign I have nothing to get. December, 2012 living with my brother and his family and stil[Show More]I am unemployed and have been trying to get my money from DLerner since July,2012 to pay my portion of mother's funeral bill, my student loans and keep a roof over my head. Got the application to complete which I did then got a whole set of forms and I was told I have to sign when I refuse I was told unless I sign I have nothing to get. December, 2012 living with my brother and his family and still cannot get anything from Dlerner only the royal run around. Who would put their hard earned savings in an investment where they cannot have access to their monies in an emergency? I am looking at homelessness because of lies. Hope the staff of DLerner and their families enjoys their chicken and turkey at their christmas dinners and home.

  • jonAugust 16, 2012 at 4:41 pm

    It is obvious REAL losses have been taken place. If you read the finance section of any NY or other city newspaper, obviously the share price is, in reality, down 25%, and another 10% from Sales Compensation! C'mon people, your statement is lying to you, so is DLerner.

  • Mary JaneFebruary 22, 2012 at 5:19 am

    If all these losses in operations is true and the distributions are being funded from investors capital and debt I will be destitute and in the street with no place to live. Almost all of my money is in Apple Reit 7 & 9. I have no money. I am terrified with no where or nobody to turn to! I am going to be 65 in October and am disabled. I cannot work. What am I to do, I will be in the stre[Show More]If all these losses in operations is true and the distributions are being funded from investors capital and debt I will be destitute and in the street with no place to live. Almost all of my money is in Apple Reit 7 & 9. I have no money. I am terrified with no where or nobody to turn to! I am going to be 65 in October and am disabled. I cannot work. What am I to do, I will be in the street!

  • SteveDecember 23, 2011 at 8:57 pm

    Everything is disclosed, the history of loss free investment is indisputable, and the only thing that could create a loss at this time is the FINRA investigation, and a baseless class action suit by some attorneys who are unconcerned with the losses they may create for their client class. A problem has been created from nothing, just adding to the insanity of our current investment climate.

  • stellaJuly 21, 2011 at 8:56 pm

    I have investments in apple 7,8 and 9. I have been receiving my dividends as promised. However, what I am reading is scary to me. So far, everyone has posted positives. Is there anyone out there besides lawyers that have a negative. It would be helpful to hear both sides.

  • AdrienneJuly 21, 2011 at 3:13 am

    IF THE REDUCTION IN DIVIDENS FROM 8% TO 7.5% IS WHAT IS BEING CONSIDERED A LOSS, JUST TAKE INTO CONSIDERATION THE ECONOMY WERE IN RIGHT NOW, I BELEIVE MOST INVESTORS WOULD FIND THAT LOSS ACCEPTABLE.

  • allenJuly 15, 2011 at 5:53 pm

    THE LAWYERS ARE THE PROBLEM HERE! THEY HAVE TO STAY THE HELL AWAY, THEY ARE THE TROUBLE MAKERS AND THE THIEVES!

  • a. papirJuly 15, 2011 at 5:49 pm

    investors are told before, that the money/ investment has to sit there for about 6-7 years and cant be touched,but the dividend is always there! you have to be patient no one lost any money! i invest with D. L. for 15 years.

  • IRVJune 29, 2011 at 5:38 am

    I have been investing with David Lerner Apple Reit for a number of years and I have never lost any money. How can someone have lost money? If you redeem you shares before the program is liquidated you get back your money at the share price you paid for it. They have some sageguards to prevent a run on the bank by everyone at the same time, but that is overall a good thing. This lawsuit has no m[Show More]I have been investing with David Lerner Apple Reit for a number of years and I have never lost any money. How can someone have lost money? If you redeem you shares before the program is liquidated you get back your money at the share price you paid for it. They have some sageguards to prevent a run on the bank by everyone at the same time, but that is overall a good thing. This lawsuit has no merit.

  • LisaJune 28, 2011 at 1:56 am

    I have not seen any losses from my monthly statements on my REIT funds with David Lerner. Are the statements misleading?

  • MaryJune 27, 2011 at 5:04 pm

    What are they talking about??? Elderly and unsophisticated investors? Just attend a seminar and look around! When David asks who has apple reit and investors raise their hands, take a look!!!! WOW!!! Someone placed fear into these investors! This is a business that takes time to mature like a bond etc. It is described as a long term investment and you are given a dividend for your investment. I[Show More]What are they talking about??? Elderly and unsophisticated investors? Just attend a seminar and look around! When David asks who has apple reit and investors raise their hands, take a look!!!! WOW!!! Someone placed fear into these investors! This is a business that takes time to mature like a bond etc. It is described as a long term investment and you are given a dividend for your investment. I don't know what loss they could have incurred. As with all investments nothing is 100% guaranteed. Patience is key. Too bad, for the hotel industry is on the upswing. I am looking forward to seeing the value of each share when it is time to sell. This is one of the better investments I have made. Thank you David.

  • PaulJune 23, 2011 at 7:55 pm

    I have been investing with David Lerner for over fifteen years and I have not experienced any losses. I cashed out a Reit a few years ago to make a different investment and had no problem with Lerner Assoc. The real proof of the value will be displayed at the time of sale.

  • DavidJune 23, 2011 at 5:38 pm

    Thank you David.

  • SteveJune 23, 2011 at 12:07 am

    My question is, how do these class action lawsuits recover losses when the shareholders haven't suffered any losses? I invest in DLA Apple REITS and in 11 years I've never suffered a loss from them. I had losses in bonds and mutual finds but never in an Apple REIT. Could someone explain how you recover a loss from no loss? I'm perplexed about this.

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