FINRA recently completed a review of communications relating to offerings of unregistered real estate investment trusts ("REITs") and direct participation programs that invest in real estate ("DPPs" and together with REITs, "Real Estate Programs"). Noting a pattern of unfair, unbalanced and misleading communications in its members’ communications with the public regarding these Real Estate Programs, FINRA recently published Regulatory Notice 13-18 in May 2013 (the "Notice") providing guidance on such communications. While, the Notice is targeted toward FINRA members such as investment banks and brokers who place securities of unlisted Real Estate Programs, the guidance provided is relevant and should be heeded by both public and private Real Estate Programs alike in connection with the preparation and distribution of offering documents.

The Notice references FINRA Rule 2210, which requires that a broker-dealer’s communications be fair, balanced and not misleading. The Notice provides the following examples of violations of Rule 2210 and remedial disclosure:

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