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Articles Posted in REITs

COVID-19 Causes This Mortgage REIT to Drop in Value  

If you lost money from investing in Granite Point Mortgage Trust (GPMT), you may be able to file a Financial Industry Regulatory Authority (FINRA) arbitration claim against the broker and their brokerage firm that sold this real estate investment trust (REIT) to you. Unfortunately, shares of Granite Point Mortgage Trust plunged in March in the wake of COVID-19 and continued to drop.

Our REIT fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK) are speaking with GPMT investors to help them explore whether they have grounds for a broker negligence case. 

Did Brokers Recommend This Unregistered Security Because of High Commissions?

Investors who backed Moody National REIT II, a nontraded real estate investment trust, are now grappling with losses sustained after this investment significantly plunged in value and the company’s public offering and distribution payments were suspended. 

Nontraded REITs, which are very high risk, are not for every investor, and yet the 7% commission the REIT paid stockbrokers may have been incentive enough to recommend them to customers even when they weren’t in the latter’s best interests.

For thirty years, Shepherd Smith Edwards and Kantas (SSEK Law Firm) has worked with investors seeking to recover losses they suffered because a broker and their broker-dealer sold them real estate investment trusts (REITs) that were too high risk for their portfolios. The unsuitability of REITs for many investors has come even clearer in the wake of the coronavirus (COVID-19) outbreak and its impact on many investments.  

REITs are not for every kind of investor and a stockbroker should only recommend them if the customer can handle the risks involved and these investments can help fulfill, rather than derail, the client’s goals. Contact our REIT fraud law firm today if you have suffered substantial losses involving your real estate investment trust that you suspect may have been caused by broker fraud or negligence. 

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Advisor Group Suspends Real Estate Investment Product Sales

Another brokerage firm has temporarily stopped selling real estate products due to the Coronavirus (COVID-19) has causing valuation issues. Advisor Group’s decision to suspend the sales of real estate interval funds and NAV real estate investment trusts (NAV REITs) comes soon after another independent brokerage-dealer (IBD), LPL Financial, announced that it was suspending its sales of a number of nontraded REITs and publicly traded property interval funds. 

The temporary cessations are counter to what IBDs did prior to the 2008 economic crisis when they sold a lot of real estate investments that were illiquid. These investments later saw their prices take a nosedive at great cost to investors. 

Preferred Apartment Communities Investors Pay High Commissions

Throughout the United States, our non-traded real estate investment trust (REIT) attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm) are speaking to investors whose registered brokers or investment advisors persuaded them to invest in Preferred Apartment Communities, which is a non-traded REIT. 

This investment has paid stockbrokers up to 7% commission and comes with additional fees, including around 4-5% in brokerage firm fees and offering costs. 

Former First Allied Securities Rep. Accused of Inappropriate REIT Recommendations

Our investor lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) are looking into claims by clients of former First Allied Securities stockbroker Shlomo Strugano. Strugano was barred by the Financial Industry Regulatory (FINRA) earlier this month.

Strugano, also known as Shlomy Strugano, is based in California. He has been the subject of at least four customer disputes, two of which are still pending. The ex-stockbroker is accused, among other things, of making inappropriate recommendations involving real estate investment trusts (REITS) to customers.

NEXT Financial Group Sold Unsuitable REITs To Investors, Including Older Seniors 

If you were an investor who suffered losses in Real Estate Investment Trusts (REITs) that were recommended and sold to you by a NEXT Financial Group broker, Shepherd Smith Edwards and Kantas (SSEK Law Firm) wants to talk to you. 

The Houston-based independent brokerage firm was recently fined $150K by the Massachusetts Securities Division for selling REITs to investors even when these investments were not suitable for them. 

Centaurus Financial Broker Named In Multiple Customer Disputes 

If you suffered substantial investment losses while Centaurus Financial broker, Katherine Nishnic, was your registered representative, please contact Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm). We can help you determine whether you have grounds for a broker fraud case. According to her BrokerCheck record, Nishnic is already the subject of at least eight customer disputes

She has been in the industry for 25 years and a Centaurus broker for four years. Previous to that, Nishnic was registered as a broker for JP Turner and before that with GunnAllen Financial, First Allied Securities, DE Frey & Co., Merrill Lynch and Pierce Fenner and Smith.  

Nicholas Schorsch’s former real estate investment trust (REIT) American Realty Capital Properties Inc. (ARCP) has arrived at a $1B settlement with investors who sued over the company’s accounting scandal that led to inflated financial results five years ago. Now called Vereit, the REIT will pay $738.5M of the class action securities fraud settlement, while Schorsch’s American Realty Capital (AR Capital) will pay $225M. American Realty Capital Property’s ex-CFO Brian Block will pay $12.5M of the settlement. Meantime, Grant Thornton, the firm’s auditor during the period of the scandal, will pay $49M.

American Realty Capital Properties admitted to a $23M accounting error in late 2014. After ARCP restated its financials, investors sold their shares, causing a $3B drop in the REIT’s value. At one point, ARCP held $20B in assets.

Investors sued, accusing the REIT of incorrectly stating financials so as to spur acquisitions and inflate financial results. Two years ago, Block pleaded guilty to securities fraud related to the accounting misstatements.

Did you invest with Centaurus Financial, Inc. or J.P. Turner & Co., Inc. and suffer losses in Structured CDs, Structured Notes, Non-Traded Real Estate Investment Trusts (“REITs”), or other investments?  If so, we may be able to help you recover your losses.

The Doss law firm and Shepherd, Smith, Edwards & Kantas are investigating claims on behalf of investors, many of which are retired and current Flour Corp. employees, who have suffered losses at the hands of Centaurus financial advisors who were formerly with J.P. Turner.  Those advisors, in many cases, mismanaged client investment accounts by placing them in high-risk and illiquid structured CDs, structured notes, non-traded REITs and other complicated investments.

Structured products, such as structured CDs and notes, are very complex and highly risky investments that are rarely suitable for most investors.  Similarly, non-traded REITs and other private placement investments are illiquid and risky investments that are not appropriate for most individual investors, especially retirees.  These investments are often sold as being safe and paying higher interest rates than most other investments.  However, the promised higher rates are often only guaranteed for a short time – typically a year – and are much riskier than more traditional investments.  Additionally, with most private placements, the supposed interest payments are often just a return of the investor’s own money, not a rate of return for the investment.  Ultimately, these investments typically lock investors into them long-term, resulting in limited income and often substantial losses.

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