David Lerner Customers Appeal Tossing of Apple REIT SuitChristie Smythe
Customers of David Lerner Associates Inc. are appealing the dismissal of a lawsuit alleging the brokerage misled investors about $6.8 billion in real estate investment trust holdings.
Lawyers for plaintiffs seeking to represent all investors in certain so-called Apple REITs filed a notice today in federal court in Brooklyn, New York, stating they will appeal the decision.
Earlier this month, U.S. District Judge Kiyo A. Matsumoto ruled that the investors couldn’t establish they had suffered a loss because their holdings were still performing, even though values had dropped. The plaintiffs claimed the brokerage, known for its founder’s “Take a tip from Poppy” slogan, misrepresented the holdings as appropriate for retirees and other retail investors.
The Syosset, New York-based firm has collected more than $600 million in fees and commissions for five Apple REITs, which invest primarily in hotels and other income-producing properties.
A spokesman for David Lerner Associates, David Chauvin of Zimmerman/Edelson Inc., said in a phone interview that the brokerage “believes that the district court correctly dismissed the plaintiffs’ complaint with prejudice” and is confident the U.S. Court of Appeals in Manhattan will affirm the dismissal.
The case is In re Apple REITs Litigation, 1:11-cv-02919, U.S. District Court, Eastern District of New York (Brooklyn).