REALTOR® A inserted an ad in the local newspaper soliciting $5,000 of investments in a "sure thing." The ad explained that he was seeking only ten investors at $5,000 each and that each investor would receive $6,000 for his investment in 30 days, or, if he chose to invest for a longer period, would receive $8,000 in 90 days. The ad stated that REALTOR® A personally guaranteed this investment experience to the first ten investors who responded to the ad.
The President of REALTOR® A's Board saw the ad and was concerned. He requested the Board's Grievance Committee review the matter and determine if a hearing was warranted. The Grievance Committee asked REALTOR® A to demonstrate that he had put liquid assets in escrow to back up his published guarantee. REALTOR® A was at first evasive, and then explained that there was no possibility of anyone losing any money as a result of his ad because he had simply been using ingenuity to develop a list of prospects interested in small real estate investments.
The Grievance Committee referred the matter to the Professional Standards Committee of the Board for a hearing, charging a violation of Article 12 of the Code of Ethics. In the subsequent hearing, REALTOR® A explained that he had told those who inquired that the opportunity was no longer available, but that he would take their names and addresses for future investment opportunities that might arise. He explained that in this case any guarantee he would make in a tangible transaction would, of course, be fully protected by liquid assets put in escrow.
The Hearing Panel concluded that REALTOR® A had not provided a "true picture" in his advertisement, and was in violation of Article 12.
