By Melodie Warner
The secretary of the Commonwealth of Massachusetts Wednesday
said Ameriprise Financial Inc. (AMP), Lincoln National Corp. (LNC)
and three other independent brokerage firms will pay a total of
$975,000 in fines and $8.6 million in restitution for allegedly
selling non-traded, real-estate investment trusts improperly.
Real-estate investment trusts, or REITs, own and manage
income-producing property or are involved in real-estate financing.
Massachusetts has imposed a rule that an investor's purchase of
these instruments can be no more than 10% of the investor's liquid
net worth.
Secretary William F. Galvin said an investigation found
significant and widespread problems with the firms' compliance with
their own policies, practices and procedure rules and adherence
with Massachusetts prospectus requirements, which left some
investors trapped in illiquid and underperforming financial
products.
Mr. Galvin said Ameriprise Financial Services Inc. agreed to pay
a $400,000 fine and make $2.59 million in restitution, while
Lincoln Financial Advisors Corp. will make $503,940 in restitution
and pay a $100,000 fine.
Ameriprise and Lincoln National representatives weren't
immediately available for comment.
In addition, Commonwealth Financial Network agreed to pay $2.07
million in restitution and a $300,000 fine; Royal Alliance
Associates will pay $59,000 in restitution and a $25,000 fine; and
Securities America will pay $778,400 in restitution and a $150,000
fine, Mr. Galvin said.
Last month, Mr. Galvin fined Bank of America Corp.'s (BAC)
Merrill Lynch & Co. unit $250,000 for allegedly improperly
selling more than $39 million in unregistered securities to two
Massachusetts cooperative banks.
Write to Melodie Warner at melodie.warner@dowjones.com
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