Investors who purchased Delaware Statutory Trust investments through Aurora Securities (CRD No. 46147) may have questions about losses, suspended or reduced distributions, illiquidity, and the brokerage firm’s review of the offerings.
Recent FINRA BrokerCheck reports for several Aurora Securities representatives disclose customer arbitrations involving real estate securities. The reported allegations include unsuitable recommendations, inadequate due diligence, overconcentration, and supervisory failures. Some publicly reported claims identify specific DST investments, including offerings connected to Inspired Healthcare Capital, Hayworth Tanglewood, and Carter Exchange’s Congressional Village.
These matters involve allegations—not findings of wrongdoing. Pending customer disputes may be denied, dismissed, settled without an admission, or decided in favor of the respondents. Each investor’s claim must be evaluated based on the specific recommendation, offering documents, communications, financial profile, and resulting losses.
What Is a Delaware Statutory Trust?
A Delaware Statutory Trust, or DST, is a legal structure that can hold one or more income-producing properties. Investors purchase fractional beneficial interests in the trust rather than directly managing the underlying real estate.
DSTs are frequently marketed to accredited investors completing a Section 1031 exchange. When applicable requirements are met, an investor may use a DST interest as replacement property and defer recognition of capital gains from the sale of other investment real estate.
Potential benefits may include passive ownership, professional management, access to institutional real estate, and relief from day-to-day landlord responsibilities.
Those potential benefits do not make DSTs safe or suitable for every investor. DST interests are generally private, illiquid securities subject to real estate, sponsor, tenant, financing, valuation, and concentration risks.
Aurora Securities and Recent DST Complaints
Aurora Securities is a FINRA-registered brokerage firm with CRD No. 46147. Its current BrokerCheck report states that the firm has been registered with the SEC and FINRA since March 26, 1999. Aurora Securities’ FINRA BrokerCheck report
BrokerCheck reports for multiple individuals associated with Aurora Securities contain recent customer disputes involving DSTs or other real estate securities.
Lori B. Kamen
Former Aurora Securities representative and executive Lori Beth Kamen (CRD No. 2805591) has eight customer disputes listed on her current BrokerCheck report.
Several pending claims allege that Aurora Securities and its supervisory personnel failed to conduct adequate due diligence or supervision concerning one or more DST investments. The alleged damages reported in these matters range from $200,000 to more than $1.5 million.
Kamen has denied the allegations and stated in BrokerCheck that she did not recommend or solicit the investments and was named in her supervisory capacity as Aurora Securities’ president and chief compliance officer. Lori Kamen’s FINRA BrokerCheck report
Austin A. Bowlin
Austin A. Bowlin (CRD No. 5674142) is registered with Aurora Securities and Secure Asset Management, L.L.C. His current BrokerCheck report lists 10 disclosures, including multiple pending customer disputes alleging unsuitable recommendations involving real estate securities.
Reported damages in the pending claims include $400,000, $1 million, $1.45 million, approximately $1.53 million, and $5 million. These amounts are allegations made by claimants and are not awards or findings of liability. Austin Bowlin’s FINRA BrokerCheck report
Roger W. Bowlin
Roger William Bowlin (CRD No. 1905652) is also registered with Aurora Securities and Secure Asset Management. His current BrokerCheck report lists 20 disclosures, including numerous customer disputes involving allegations related to real estate securities.
Recent reported claims allege unsuitable recommendations and request damages ranging from six figures to several million dollars. The matters remain subject to their individual procedural histories and defenses. Roger Bowlin’s FINRA BrokerCheck report
Taylor W. Armstrong
Taylor Wilson Armstrong (CRD No. 6984140) is registered with Aurora Securities and Secure Asset Management. His current BrokerCheck report lists five customer disputes, including pending claims alleging unsuitable recommendations involving real estate securities.
The reported alleged damages include approximately $345,455, $1 million, and $5 million. Again, these are amounts claimed in pending disputes—not adjudicated losses or awards. Taylor Armstrong’s FINRA BrokerCheck report
Why Multiple Complaints Deserve Careful Review
The existence of several complaints does not prove that Aurora Securities or any representative violated securities laws or FINRA rules. Complaints may also overlap, with the same arbitration appearing on more than one associated person’s report.
Nevertheless, multiple recent disputes involving similar products and allegations may justify examining whether the issues extend beyond an isolated recommendation.
Relevant questions include:
- Which DST sponsors and offerings did Aurora Securities approve?
- What product-level due diligence did the firm perform?
- Did the firm independently examine sponsor-provided projections?
- Were representatives trained to evaluate DST risks?
- Did supervisors monitor the percentage of a customer’s assets placed in DSTs?
- Were investors relying on the DST distributions for retirement income?
- Did the firm review repeated sales involving the same sponsors?
- Were commissions and other conflicts clearly disclosed?
- Did the 1031 exchange deadline place investors under pressure to proceed?
- Did the firm respond appropriately to distribution cuts, sponsor distress, or earlier complaints?
The answers require more than a review of the investor’s subscription agreement. A meaningful investigation may also involve supervisory records, product committee materials, due-diligence reports, correspondence with sponsors, exception reports, and compensation records.
You’re right—the competitor-firm links should not be used. Replace everything from “DST Sponsors and Offerings Identified in Publicly Reported Claims” downward with the following source-clean version based on FINRA, IRS, SEC-filed materials, and the investors’ own records.
Identifying the DST Sponsors and Offerings at Issue
Public BrokerCheck disclosures involving Aurora Securities representatives generally classify the investments as real estate securities or DST investments. The disclosures do not consistently identify the sponsor, property, or complete offering name.
For that reason, investors should review their own records to identify exactly what they purchased rather than assume that every Aurora Securities complaint involves the same product.
Documents that may identify the offering include:
- Private placement memoranda;
- Subscription agreements;
- DST trust agreements;
- Qualified intermediary records;
- Section 1031 identification notices;
- Account statements;
- Wire-transfer instructions;
- Schedules K-1;
- Distribution statements;
- Sponsor correspondence; and
- Notices concerning reduced distributions, defaults, restructuring, or property sales.
The review should record:
- The full legal name of each DST;
- The DST sponsor and its affiliated entities;
- The underlying property or properties;
- The property type and location;
- The amount invested;
- The date of purchase;
- The selling commission and other fees;
- The amount of debt placed on the property;
- The projected distribution rate;
- Whether distributions were reduced or suspended; and
- The current estimated value, if available.
Identifying the actual offering is important because DSTs may differ substantially in their property type, financing, tenant concentration, sponsor experience, fee structure, and exit strategy.
Why Multiple Complaints May Warrant a Broader Review
FINRA BrokerCheck disclosures involving Aurora Securities-associated representatives include allegations concerning unsuitable real estate securities, inadequate due diligence, and supervisory failures. These remain allegations unless established through an arbitration award, regulatory action, or court judgment.
Multiple disclosures do not automatically establish a firm-wide sales problem. The same arbitration may also appear on the BrokerCheck reports of more than one representative or supervisor, so disclosure counts should not be added together without checking for overlapping docket numbers, filing dates, allegations, and claimed damages.
Nevertheless, repeated allegations involving similar investments may warrant reviewing whether Aurora Securities had appropriate systems for:
- Approving DST offerings;
- Investigating sponsors and properties;
- Training representatives about material risks;
- Reviewing projected distributions;
- Monitoring customer concentration;
- Evaluating liquidity needs;
- Reviewing sales to retirement-age investors;
- Identifying repeated sales of the same sponsor’s products;
- Evaluating commissions and conflicts; and
- Responding to reduced distributions, sponsor distress, or earlier complaints.
Aurora Securities’ official BrokerCheck report identifies the firm as CRD No. 46147 and SEC No. 8-51322. The firm report itself presently lists no firm-level disclosure events, which are distinct from customer disputes reported on individual representatives’ BrokerCheck records. (FINRA)
What Should DST Due Diligence Examine?
Brokerage-firm due diligence should involve more than confirming that the sponsor supplied a private placement memorandum.
FINRA states that a broker-dealer recommending a Regulation D offering has a duty to conduct a reasonable investigation of the issuer and the securities. A firm may not blindly rely on information supplied by an issuer or its counsel, particularly when warning signs call for additional investigation. (FINRA)
FINRA has also identified instances in which firms failed to conduct reasonable diligence, relied excessively on third-party reports, or failed to investigate significant concerns identified during the review process. (FINRA)
For a DST offering, due diligence may need to address the following areas.
Sponsor history and financial condition
Relevant questions include:
- How long had the sponsor operated?
- How had its earlier offerings performed?
- Had prior DSTs reduced or suspended distributions?
- Did the sponsor have adequate capital, personnel, and operating resources?
- Was the sponsor dependent on continually raising investor funds?
- Did the sponsor or its executives have material regulatory, litigation, or bankruptcy histories?
- Were audited financial statements available?
- Did the sponsor use related-party entities?
- What fees did the sponsor and its affiliates receive?
A sponsor’s marketing materials should not substitute for an independent investigation.
Property-level economics
The firm should understand the underlying property rather than rely on generalized statements about the real estate market.
Relevant issues may include:
- Purchase price and appraised value;
- Property type and location;
- Occupancy history;
- Lease-expiration schedules;
- Tenant concentration;
- Tenant creditworthiness;
- Local supply and demand;
- Deferred maintenance;
- Capital-improvement requirements;
- Property taxes and insurance;
- Historical operating expenses; and
- Assumptions supporting projected distributions.
Senior housing, multifamily properties, medical facilities, student housing, hospitality assets, and single-tenant properties can present materially different risks.
Debt and refinancing risk
Leverage may increase potential returns when a property performs well, but it can also magnify losses.
A review should consider:
- The loan-to-value ratio;
- Fixed or variable interest rates;
- Loan maturity dates;
- Refinancing assumptions;
- Interest-rate caps;
- Debt-service coverage;
- Balloon payments;
- Lender reserves;
- Financial covenants; and
- Consequences of default.
A property acquired during a low-interest-rate environment may face substantial pressure when its original financing matures.
Projected distributions
Projected distributions are not guaranteed income.
Due diligence should examine whether distributions were expected to come from sustainable property operations or whether they depended on reserves, financing proceeds, temporary concessions, aggressive occupancy assumptions, or other nonrecurring sources.
Investors should also determine whether the quoted distribution percentage was based on the amount invested, the property’s equity value, or another figure. A projected distribution rate is not necessarily the same as an investor’s total return.
Fees and conflicts
DST offerings may impose numerous costs, including:
- Selling commissions;
- Dealer-manager fees;
- Organization and offering expenses;
- Acquisition fees;
- Financing fees;
- Asset-management fees;
- Property-management fees;
- Investor-servicing fees; and
- Disposition fees.
These expenses may reduce the amount of investor capital used to acquire and operate the property. High upfront expenses can also require substantial property appreciation before an investor recovers the full amount invested.
Concentration Risk in DST Recommendations
Concentration risk arises when too much of an investor’s net worth, retirement savings, liquid assets, or income-producing portfolio is committed to DSTs or similar private real estate securities.
Owning interests in several DSTs does not necessarily create meaningful diversification. The investments may share:
- The same sponsor;
- The same property sector;
- Similar geographic exposure;
- The same tenant or operator;
- Comparable loan-maturity dates;
- Similar sensitivity to interest rates; or
- Dependence on the same economic assumptions.
For example, investing in several senior-housing DSTs may leave an investor heavily exposed to one industry even when each trust owns a separate property.
A concentration analysis should consider the investor’s complete financial profile, including:
- Age;
- Employment and retirement status;
- Income requirements;
- Emergency reserves;
- Other real estate holdings;
- Liquid investments;
- Debt and ongoing expenses;
- Tax obligations;
- Investment experience;
- Time horizon;
- Risk tolerance; and
- Ability to hold an illiquid investment during a prolonged downturn.
FINRA’s suitability rule identifies age, other investments, financial situation, tax status, objectives, experience, time horizon, liquidity needs, and risk tolerance as relevant parts of a customer’s investment profile. (FINRA)
Accredited-investor status does not, by itself, establish that a concentrated DST portfolio was appropriate.
DST Liquidity and Distribution Risks
DST interests generally do not trade on a public securities exchange. An investor may be unable to sell when cash is needed, and an attempted secondary sale may require accepting a substantial discount.
Liquidity risk can be particularly important for investors who:
- Depend on distributions for retirement income;
- Have limited emergency reserves;
- May face medical or long-term-care costs;
- Invested most of the proceeds from a property sale;
- Expected access to their principal within several years; or
- Understood the investment to be conservative or readily marketable.
A DST investor may face two related problems when distributions are reduced or suspended: the anticipated income disappears, and the investor may have no practical way to sell the investment at a reasonable price.
A distribution reduction does not automatically establish broker liability. It may, however, become relevant when examining what the investor was told about income reliability, liquidity, downside risk, and sponsor performance.
The Section 1031 Deadline Does Not Eliminate the Need for Careful Review
A deferred Section 1031 exchange generally requires replacement property to be identified within 45 days after transferring the relinquished property. The replacement property generally must be received within 180 days or by the applicable tax-return deadline, including extensions, if earlier. (IRS)
These deadlines may place considerable pressure on investors seeking to preserve tax deferral. DSTs may appear attractive because a fractional interest can sometimes be identified and acquired more quickly than an entire replacement property.
Time pressure, however, can make it difficult to evaluate:
- The sponsor’s history;
- The property’s financial condition;
- Projected distributions;
- Financing and refinancing risks;
- Commissions and fees;
- Illiquidity;
- Exit assumptions; and
- Reasonable alternatives.
A tax deadline does not make an otherwise inappropriate investment suitable. The recommendation should still account for the investor’s financial circumstances, objectives, risk tolerance, liquidity needs, and overall portfolio.
Potential Claims Against Aurora Securities
Depending on the facts, an investor may have potential claims against Aurora Securities or an associated representative. The existence of losses or a customer complaint does not establish that any particular claim is valid.
Unsuitable recommendations
A DST recommendation may have been unsuitable if its risks were inconsistent with the investor’s:
- Financial condition;
- Investment experience;
- Retirement needs;
- Risk tolerance;
- Time horizon;
- Need for liquidity;
- Dependence on investment income; or
- Ability to withstand a substantial or complete loss.
A recommendation can also raise suitability concerns when it creates excessive concentration in illiquid real estate securities.
Regulation Best Interest claims
When Regulation Best Interest applies, relevant questions may include whether the representative adequately considered:
- The investment’s risks and costs;
- Reasonably available alternatives;
- The investor’s liquidity needs;
- Portfolio concentration;
- The expected holding period;
- Commissions and conflicts; and
- Whether the recommendation served the retail customer’s best interest.
Misrepresentations and omissions
Potential claims may involve statements or omissions concerning:
- Whether principal was protected;
- Whether distributions were guaranteed;
- The possibility that payments could be reduced or suspended;
- The absence of a reliable secondary market;
- Sponsor and affiliate conflicts;
- Property-specific operating risks;
- Debt and refinancing exposure;
- Commissions and offering costs;
- The expected holding period;
- The possible exit value; and
- The difference between tax deferral and investment safety.
Inadequate due diligence
An investor may allege that the firm approved or recommended a DST without reasonably investigating:
- The sponsor;
- Sponsor management;
- The underlying property;
- Tenant or operator risks;
- Property financing;
- Financial projections;
- Distribution assumptions;
- Related-party transactions;
- Prior offering performance; or
- Material warning signs.
FINRA’s private-placement guidance states that reasonable investigations should address the issuer and management, business prospects, assets, offering claims, and intended use of proceeds. FINRA also expects firms to document the process and results of their investigation. (FINRA)
Failure to supervise
A supervisory claim may examine whether Aurora Securities:
- Reviewed the representatives’ DST recommendations;
- Monitored investor concentration;
- Evaluated repeated sales involving the same sponsors;
- Reviewed investor financial-profile information;
- Examined marketing materials and communications;
- Investigated inconsistencies in account documents;
- Evaluated commissions and conflicts;
- Followed up on sponsor-level warning signs; and
- Responded appropriately to earlier complaints or distribution problems.
Other claims may include negligence, breach of fiduciary duty, breach of contract, or negligent misrepresentation, depending on the relationship, governing law, and underlying evidence.
Allegations Are Not Findings
BrokerCheck customer disputes describe allegations made by investors. They do not establish that:
- Aurora Securities violated a law or FINRA rule;
- An associated representative committed misconduct;
- A DST sponsor acted improperly;
- A recommendation was unsuitable;
- Claimed damages reflect the investor’s actual losses; or
- The respondents caused the alleged harm.
Pending claims may be denied, dismissed, settled, or resolved through an arbitration award. A settlement does not necessarily include an admission of liability.
Disclosure counts must also be used carefully. The same claim may appear on the BrokerCheck reports of the recommending representative, another associated person, and a supervisor. Overlapping disputes should be identified by comparing docket numbers, filing dates, alleged damages, and descriptions.
Documents Aurora Securities DST Investors Should Preserve
Investors evaluating a potential claim should preserve the following materials.
Offering documents
- Private placement memoranda;
- Subscription agreements;
- DST trust agreements;
- Property appraisals;
- Financial projections;
- Due-diligence reports;
- Financing summaries;
- Investor questionnaires;
- Accreditation documents;
- Distribution statements; and
- Notices involving reduced payments, defaults, restructuring, or property sales.
Section 1031 exchange records
- Closing statements for the relinquished property;
- Qualified intermediary agreements;
- Replacement-property identification notices;
- Exchange instructions;
- Records showing the 45- and 180-day deadlines;
- Communications about possible replacement properties; and
- Legal or tax advice concerning the exchange.
Advisor communications
Preserve emails, text messages, letters, voicemails, presentation materials, and meeting notes discussing:
- Safety or principal protection;
- Projected distributions;
- Liquidity;
- Holding periods;
- Sponsor experience;
- Property performance;
- Commissions and fees;
- Tax consequences;
- Alternative investments; and
- The percentage of the investor’s assets placed in DSTs.
Financial-profile records
Collect:
- New-account forms;
- Risk-tolerance questionnaires;
- Financial plans;
- Retirement projections;
- Net-worth statements;
- Income records;
- Liquidity information;
- Investment-objective forms; and
- Documents showing the investor’s financial condition when the recommendations occurred.
Evidence of losses
Preserve records showing:
- The original amount invested;
- Reduced or suspended distributions;
- Current valuation estimates;
- Secondary-market offers;
- Tax and accounting expenses;
- Refinancing or loan consequences;
- Restructuring or bankruptcy expenses; and
- Other out-of-pocket costs.
Do Not Assume You Must Wait for a Property Sale or Sponsor Bankruptcy
An investor may believe that a claim cannot be evaluated until the property is sold, the sponsor completes a restructuring or bankruptcy, or the DST’s final value becomes known.
Waiting can create potential deadline problems.
FINRA eligibility rules, statutes of limitation, contractual provisions, and other time-related defenses may apply while the investment remains illiquid. An investor’s damages analysis can be updated as distributions, valuations, restructuring terms, or sale results become available.
How Sonn Law Helps DST Investors
Sonn Law Group represents investors in disputes involving DSTs, private placements, unsuitable real estate securities, misrepresentations, due-diligence failures, and inadequate brokerage supervision.
An Aurora Securities DST investigation may include:
- Identifying each DST, sponsor, and underlying property;
- Determining which representative recommended the investment;
- Reviewing Aurora Securities’ role in the sale;
- Examining the investor’s financial profile and Section 1031 objectives;
- Evaluating concentration across sponsors, properties, and real estate sectors;
- Reviewing representations about income, safety, liquidity, and holding periods;
- Investigating sponsor- and property-level warning signs;
- Analyzing commissions, expenses, and conflicts;
- Calculating principal, income, and consequential losses; and
- Evaluating potential claims through FINRA arbitration.
Speak With an Aurora Securities DST Attorney
Investors who purchased DSTs through Aurora Securities (CRD No. 46147) or representatives including Lori B. Kamen (CRD No. 2805591), Austin A. Bowlin (CRD No. 5674142), Roger W. Bowlin (CRD No. 1905652), or Taylor W. Armstrong (CRD No. 6984140) may have questions about their legal options.
A meaningful review should identify the actual DST sponsor and offering, determine how much of the investor’s portfolio was concentrated in illiquid real estate securities, examine what was represented about distributions and principal, and evaluate the brokerage firm’s due diligence and supervision.
Sonn Law Group represents investors nationwide in FINRA arbitration claims. Contact the firm for a confidential evaluation of an Aurora Securities DST investment and the resulting losses.
Frequently Asked Questions
Are DST investments safe?
DSTs may involve illiquidity, loss of principal, sponsor dependence, tenant risk, leverage, refinancing risk, reduced distributions, and uncertain exit values. They are not guaranteed investments.
Does a suspended distribution establish broker liability?
No. A reduced or suspended distribution does not automatically prove misconduct. A potential claim depends on the recommendation, disclosures, due diligence, supervision, causation, and investor-specific circumstances.
Does investing in several DSTs provide diversification?
Not necessarily. Several DSTs may share a sponsor, property sector, geographic market, tenant, financing structure, or exposure to the same economic conditions.
Are Aurora Securities BrokerCheck complaints findings of misconduct?
No. Customer disputes contain allegations, not findings of liability. Pending claims may be denied, dismissed, settled, or decided through arbitration.
How can investors identify their DST sponsors and offerings?
Investors should review their private placement memoranda, subscription agreements, account statements, Section 1031 identification notices, qualified intermediary records, Schedules K-1, and distribution statements.
Can a brokerage firm be responsible when a DST performs poorly?
Poor performance alone does not establish brokerage-firm liability. A potential claim may arise when evidence supports allegations involving an unsuitable recommendation, material misrepresentation, excessive concentration, inadequate due diligence, or deficient supervision.
Where are Aurora Securities investor claims generally filed?
Customer disputes against FINRA-member brokerage firms and associated representatives are commonly pursued through FINRA arbitration. The appropriate forum depends on the parties, agreements, timing, and claims.
This article is for general informational purposes and does not provide legal, investment, or tax advice. Customer complaints and arbitration claims contain allegations that may be disputed and are not findings of liability unless established by an authorized tribunal.
