The law firm of Oakes & Fosher is presently investigating the alleged misconduct of securities broker Robert Ginsberg. According to his publicly available FINRA BrokerCheck report, Robert Ginsberg has been the subject of multiple customer disputes connected to his alleged recommendations of non-traded REITs.

Robert Ginsberg is a Connecticut based securities broker. He has worked in the securities industry for eleven years. During his career, he has been registered with two different securities firms.

His Registrations

  • Investors Capital Corp. (2008-2016)
  • Woodbury Financial Services (2016-Present)

The Allegations

Robert Ginsberg is the subject of multiple pending disputes from customers alleging he recommended they purchase highly unsuitable non-traded REITs. One claim filed in November 2017 has the customer seeking $1 million in damages. One claim filed in December 2017 has the customer seeking an undisclosed amount in damages. Finally, one claim filed in April 2019 has the customer seeking $500,000 in damages.

Non-traded REITs, also known as real estate investment trusts, are privately traded investments that are not registered with the Securities and Exchange Commission. They are investment pools designed to fund real estate development projects or provide private mortgages to those wishing to purchase real estate. Because they are poorly regulated and not traded on any public securities exchanges, non-traded REITs harbor a great potential for oversight. Many brokers like Robert Ginsberg will use this to their advantage and misrepresent non-traded REITs as low-risk investments when nothing could actually be further from the truth.

The truth about non-traded REITs is that they are typically, very speculative and very illiquid due to the nature of the investment. Once an investor purchases a non-traded REIT, they may be stuck in this investment for many years. Even if an emergency arises, and they need to get to their funds, REITs may be very difficult to liquidate. Sponsors of these products will only offer redemptions on a very small percentage (if any) of the outstanding shares of the REIT on an annually basis. Some non-traded REITs can be sold on a secondary market, however, at a price that is typically much lower than the value stated by the REIT sponsor, and done with significant costs. REIT pricing can be very misleading as the value of most of these products is very difficult to determine, and the REIT sponsor will set a price that typically overstates the market value of the non-traded REIT.

Despite how unsuitable these investments are, brokers like Robert Ginsberg continue to push them onto unsuspecting investors due to the incredibly high commissions they receive when the transaction is executed. The broker’s commission can be as high as eight percent of the investor’s principal investment. When an investor’s principal is lowered that significantly, the chances of them actually seeing any returns on their investment lowers drastically. Essentially, non-traded REITs are unsuitable for investors and only exist to service brokers and those operating them.

Oakes & Fosher Can Help

Many investors are unaware of the legal recourse available to them after losing money due to securities broker fraud and/or negligence. The truth is that investors who have lost money in this fashion may actually be entitled to damages.

Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with Robert Ginsberg, please contact Oakes & Fosher for a free and private consultation.