One-Time Major REIT Player Leo Wells Closes His Broker/Dealer

Following abysmal deals involving non-traded real estate investment trusts (REITs) and fraudulent private placement offerings in Medical Capital Holdings and Provident Royalties, a growing number of broker/dealers have been forced to close their doors for business this year. In fact, over the past four years, the number of broker/dealers has decreased by almost 15%.

As reported Dec. 30 by Investment News, the Financial Industry Regulatory Authority (FINRA) showed 4,895 broker/dealer members under its regulatory watch in 2008. As of last month, that number had shrunk to 4,180.

Now another broker/dealer is joining those ranks. Last week, Wells Investment Securities Inc. filed its termination request with FINRA.

It’s a big change for Wells owner Leo Wells. A decade ago, Wells was one of the biggest names in the non-traded REIT industry, with his real estate investment trusts selling agreements to as many as 200 independent broker/dealers.

Wells’ end in the securities business follows several other high-profile names who met a similar fate. Tony Thompson, a major player in the non-traded REIT business, closed the doors on TNP Securities last month. As reported by Investment News, the shuttering of TNP came just a few months after FINRA filed a complaint against Thompson. Among other things, the complaint cited fraud allegations over the sale of promissory notes to raise capital for his real estate company.