A review of recent FINRA Arbitration Awards show that TIC investors have had multiple victories in sales practice claims against the FINRA brokerage firms that sold them Tenant in Common (TIC) investments. Claims have included securities fraud, breach of fiduciary duty, negligence, failure to supervise, elder abuse, and misrepresentations and omissions. The following FINRA awards may be found at the FINRA web site:
1. Hardt, et al. v. LPL Financial LLC. No. 11-00347. The arbitration panel in this San Diego, California arbitration awarded $1,367,000.00 in compensatory damages, interest, and costs. Claims against two other Broker-Dealers were dismissed by Claimants. The claims related to investments with Direct Invest LLC which included investments in Heron Cove. LLC and Braintree Park, LLC.
2. Lightfoot, et al. v. Pacific West Securities, et al. No. 11-00230. A Seattle, Washington panel submitted another multi-million dollar award: $1,862,960,65 plus $200,000 in attorneys fees for violations of the Securities Act of Washington. The panel found a violation of the standard of care by Respondents for “the disavowal by Respondents of any obligation to conduct a suitability analysis for the sale of TICs in the circumstances of a Section 1031 - like kind assets exchange for tax deferral purposes.” Multiple TICs were involved: TSG Midwest, Evergreen Springs, Argus TriWest, Passco River Park and Passco Promenade.
3. Griswold v. Burch & Company, Inc., et al. No. 10-02477. In this Alaska case, the panel awarded almost all of the compensatory damages requested ($350,000), plus interest for a claim related to Beamer Place Apartments.
4. Tommerup, et al. v. Waveland Capital Partners LLC, et al. No. 10-04616. This Helena Montana arbitration involved two DBSI TIC investments (Executive Park LLC, and DBSI Arrowhead, LLC 1965, 1705 & 1715
Indian Woods Circle), and a request for $410,000 in damages. The panel awarded $301,875.00 which included interest, and $27,000 of discovery sanctions.
5. Wiborg, et al. v. Pacific West Securities, Inc. No. 10-02818. In another arbitration involving Pacific West (this one in San Francisco), the Panel awarded $300,000 plus $50,000 in punitive damages. In awarding the punitive damages, the panel described the basis for its finding that Respondent “failed to supervise” the broker involved. The Claimant alleged damages from two TICs - DBSI Offices at Brookhollow Tenant-in-Common securities and Garlock & Company Museum Park Garage Tenant-in-Common securities.