David Lerner, who promotes his firm in radio advertisements by saying, "Take a tip from Poppy," may soon have to add the disclosure, "The same Poppy who's been charged with misleading investors." The charges against Mr. Lerner were filed by FINRA in a December complaint , based on statements he allegedly made to quell anxious customers.  Eight months earlier, FINRA filed a proceeding against his Long Island-based brokerage firm, David Lerner Associates Inc., charging the firm with having misled investors in its marketing of real estate securities.  The brokerage has 6 offices in the Northeast and Florida. FINRA Findings and Allegations. According to FINRA, Lerner allegedly made misleading statements to investors about risk and valuation when marketing a $2 billion non-traded real estate investment, or REIT - Apple REIT Ten.   FINRA filed the complaint on 12/13/11, them posted the allegation on Lerner's personal BrokerCheck report on 1/13/12. Earlier in the year, FINRA alleged that the firm did not perform "adequate due diligence" to determine if the REIT was appropriate for its investors.  FINRA also alleged that the firm's management "inappropriately valued the REITs' shares at a constant artificial price" despite years of real estate market fluctuations.

REITs invest in commercial real estate, such as hotels and strip malls, offering a way to profit from rises in property values.  Non-traded REITs, which do not trade on securities exchanges, can be illiquid or difficult to sell in secondary markets. They also often have higher fees for investors than publicly traded REITs.

More Specifics About Mr. Lerner's Statements. FINRA's recent complaint against Lerner as an individual pertain to statements he made to investors shortly after FINRA's actions against the firm were made public.  Lerner sent letters to more than 50,000 customers in July to "counter negative press" about the action, according to FINRA's amended complaint. The letter also discussed a possible opportunity for Apple REIT shareholders to participate in a sale or listing on a national exchange to dispose of their shares at a reasonable price. Further, Mr. Lerner allegedly made misleading, exaggerated statements to investors at a seminar his brokerage hosted, including the statement that closed REITs are a potential "gold mine."  David Lerner Associates apparently is the sole distributor of Apple REITs. A spokesman said FINRA's allegations against Lerner "lack any focus," adding that the Apple REIT programs, including several offerings that are already closed, have returned about $3 billion to their investors. For further details, go to:   [Reuters, 1/30/12].