David Lerner Associates
| Corporation | |
| Industry | Financial Services |
| Founded | 1976 |
| Founder | David Lerner |
| Headquarters |
Syosset, NY United States |
| Products | Investments |
| Owner | David Lerner |
Number of employees | 350+ |
| Slogan | "The sensible middle ground of investing." |
| Website | www.davidlerner.com |
David Lerner Associates is a privately held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. Their product offerings include Apple Real Estate Investment Trusts (REITs), bonds, collateralized mortgage obligations, retirement funds, mutual funds, life insurance, and other services.[1]
They have become well known in the New York metropolitan area for their "Take A Tip From Poppy" radio segments[2] and regularly hold free investment seminars in the tri-state New York area and Florida.[1]
The firm has been recognized as one of the most successful money-raisers in the real estate industry by promoting a steady 7-8% return for mom-and-pop investors.[3] As of June, 2011, the Company had sold approximately $6.8 billion in Apple REIT securities to 122,000 customers since 1992. In 2010 alone they raised $1 billion for one fund.[3]
History
According to the Company website, David Lerner was previously a History and Economics high school teacher in Bayside, New York. To make ends meet, he began to sell mutual funds and life insurance for First Investors in 1961.[1] In 1976, he founded David Lerner Associates, Inc. with their first office located in Jericho, New York.
In the late 1970s, market conditions changed causing the firm to re-assess the value of mutual funds. Lerner began offering tax-free municipal bonds.[1]
By 1980, to cope with rapid expansion, the firm began outsourcing regulatory duties to a third-party firm, Security Pacific, a bond clearinghouse. After finding that Security Pacific "did not follow the rules," Lerner reported the issues to the National Association of Securities Dealers (NASD) and after "months of intense activity and investigation all issues were resolved."[1]
Today, David Lerner Associates employs approximately 400 people, with its headquarters in Syosset, New York and satellite offices in Princeton and Teaneck, New Jersey; White Plains, New York; Westport, Connecticut; and Boca Raton, Florida.[1]
Lerner has been a notable donor to causes in his community, including the Trey Whitfield School in Brooklyn, which he has supported with $300,000 in donations while helping to raise another $1 million, earning him a spot in the "Donor of the Day" column in the Wall Street Journal.[4] He has for twenty years been the "prime donor" in the Greater Long Island Running Club, which sponsors the annual Police Appreciation Run. In April 2011 Lerner donated $10,000 to the club to help the family of a police officer who had been shot and killed. In January 2012 Lerner presented a check, with the club, to cover school expenses for the children of a slain local ATF agent.[5][6]
Awards
According to a survey conducted by the Best Companies Group in 2011, David Lerner Associates was awarded 6th place in the large employer category as one of the Best Companies to work for in New York State.[7]
Merger of Apple REIT Six
On November 30, 2012, in what Investment News termed a "clear win for David Lerner Associates Inc. and its clients", Apple REIT Six Inc. announced that it had entered into a definitive merger agreement with an affiliate of the Blackstone Group LP. If approved by shareholders, the merger would add slightly to the principal of the investors who also collected distributions of 7% to 8% annually over the lifetime of the REIT. Apple REIT Six was sold exclusively by David Lerner Associates to investors from 2004 to 2006, with most shares at $11. Each holder of an Apple REIT Six unit will receive $11.10 in value, consisting of $9.20 in cash and $1.90 per share in preferred stock of the Blackstone affiliate, BRE Select Hotels Corp. Investors will have an option to redeem the new shares after seven and a half years; the shares have a dividend rate of 7%. The total transaction value of the deal is $1.2 billion and is expected to close in the first half of 2013.
The portfolio of Apple REIT Six consists of 66 hotels in 18 states and is one of a number of non-traded REITs to cash out successfully for investors this year.[8][9]
FINRA complaint and dismissal
In May 2011, the Financial Industry Regulatory Authority (FINRA) filed a class action lawsuit against David Lerner Associates, charging the firm with misleading investors by marketing unsuitable products to them and conducting insufficient due diligence on the company that managed its real estate funds.[10]
In October 2012, David Lerner Associates agreed to settle with FINRA for $14 million without admitting or denying the charges.[11]
In April 2013, U.S. District Judge Kiyo Matsumoto dismissed the class action lawsuit, ruling that investors had received sufficient disclosure to understand the risks of investing in its trusts.[12] In her opinion, Judge Matsumoto wrote, “Plaintiffs’ belabored Complaint appears only to confirm that the Apple REITs are currently functioning in exactly the manner that was anticipated and disclosed in the REITs’ prospectuses and other offering documents.”[13]
References
- 1 2 3 4 5 6 Company website
- ↑ Bloomberg
- 1 2 Wall Street Journal
- ↑ The Wall Street Journal http://online.wsj.com/article/SB10001424052748704369304575633023945537524.html. Missing or empty
|title=(help) - ↑ Newsday
- ↑ Syosset Patch
- ↑ Best Companies Press Release
- ↑ Investment News Article
- ↑ Richmond Times-Dispatch
- ↑ Troianovski, Anton (June 1, 2011). "Finra Sues David Lerner Firm". The Wall Street Journal. Retrieved 10 December 2013.
- ↑ "Order Accepting Offer Of Settlement" (PDF). Financial Industry Regulatory Authority (FINRA). Retrieved 10 December 2013.
- ↑ Phillips, Ted (April 4, 2013). "Class-action suit against David Lerner Associates dismissed". Newsday. Retrieved 10 December 2013.
- ↑ Singer, Bill (April 4, 2013). "David Lerner And Apple REITs Defendants In Stunning Class Action Victory". Forbes. Retrieved 10 December 2013.