THE REAL CHIP KEATING

Apple REIT Ten (2011–2016)

In January 2011, the 30-year-old Keating left Chesapeake Energy and was elected to the Board of Directors of Apple REIT Ten Inc., a Richmond, Virginia-based non-traded real estate investment trust. He served on the company's Audit Committee and Compensation Committee.

​

Just months later, in May 2011, FINRA filed a complaint against the REIT's exclusive broker, David Lerner & Associates (DLA), alleging it was "targeting unsophisticated and elderly customers" with unsuitable sales of the illiquid security. The New York Times reported regulators accused the firm of "misleading investors by selling shares in illiquid real estate investment trusts, or REITs, to unsophisticated and elderly customers." A class action lawsuit followed, alleging DLA sold the REITs to "many elderly, retired and/or unsophisticated customers" while paying 7–8% returns "not from income or funds from operations but paid from new investor money or borrowing." In October 2012, FINRA fined DLA approximately $14 million for "targeting unsophisticated investors and the elderly." Although the class action was dismissed in 2013, a separate 2016 shareholder derivative lawsuit accused Keating and his fellow directors of breaching fiduciary duty during the merger with Apple Hospitality REIT, ultimately resulting in a $32 million settlement.

​

Energy 11 LP (2013–2023)

Keating and his Apple REIT Ten associates launched Energy 11 LP in 2013 to raise money for oil and gas assets, partnering with the late Aubrey McClendon. Once again, David Lerner & Associates marketed the product. In November 2020, the law firm KlaymanToskes announced an investigation into DLA's marketing of Energy 11 LP and related products to "risk averse investors, such as retirees or other conservative investors, that were seeking income and capital preservation," with reported losses exceeding $250,000. By 2022, Energy 11 LP had $45 million in unpaid distributions to investors, and a DLA broker was barred by FINRA over potential unsuitable sales of the proprietary energy fund. Keating sold his remaining shares in Energy 11 LP in April 2023.