In a recent FINRA arbitration case, several investors claimed breach of fiduciary duty, common law fraud, breach of contract, violation of the Florida Securities and Investor Protection Act, and negligence. These claims are a result of investments in Inland Western and Inland American Real Estate Investment Trusts which are non-traded REITs.
The respondents in the case were Sterling Enterprises Group, Inc. (Sterling), represented by Alyn Lee Towne III, and Retirement Securities, Inc (Retirement).
FINRA awarded the claimants over $900K after finding Sterling and Retirement jointly and severally liable for multiple violations of the Florida Securities and Investor Protection Act (Chapter 517 Florida Statutes).
Coleman Law Firm, out of Clearwater, Florida, represented the claimants in this case. Mr. Coleman was not available to discuss the case or award.
“Nothing in the Award reflects negatively on Inland REITS,” commented Jeremy L. Bartell of Bartell Law PLLC. Bartell continued “According to the Award, the Respondents faced fraud allegations, but did not file Answers or bother to appear at the hearing to defend their alleged conduct.”
After a check of FINRA, The DI Wire has learned that Retirement Securities, Inc. has not been registered since September 30th, 2008.
Sterling terminated its registration through a filing on December 17th, 2012. This came about one year after a FINRA case was initiated by Gulf Blue Investments, LLC (Gulf Blue) alleging fraud and unsuitability, amongst other claims against Sterling, Alyn Towne, majority owner of the broker dealer, and two others.
On June 3rd, 2013, Gulf Blue was awarded $1.6 million as a result of the panel’s decision that Sterling, Towne, and the two other individuals are “jointly and severally liable on the claims of unsuitability, fraud, and negligence” as they relate to a 1031 exchange. By November 20th, 2013, a lien was placed on Mr. Towne for $1.65 million as a result of non-payment to Gulf Blue.
Currently, Mr. Towne is registered with Sterne Agee Financial Services, Inc.