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Articles Tagged with REIT fraud

Non-Traded REIT Seeks To Restructure $1.3B in Unsecured Debt

If you are an investor whose broker recommended that you invest in Hospitality Investors Trust (HIT), you may have grounds for a Financial Industry Regulatory Authority (FINRA) arbitration claim to recover damages. 

Hospitality Investors Trust used to be called American Realty Capital Hospitality Trust (ARC Hospitality Trust). In May 2021, the publicly registered non-traded real estate investment trust (non-traded REIT) filed for Chapter 11 Bankruptcy protection as it seeks to restructure its $1.3B in unsecured debt. 

SEC Looks at Reimbursements Made to Legendary Capital REIT III

If your financial advisor recommended that you invest in Lodging Fund REIT III and you suffered losses, you may have grounds for a broker fraud claim to recover damages. 

The publicly registered non-traded real estate investment trust (REIT) disclosed in a recent filing with the US Securities and Exchange Commission (SEC) that since December 2020 the latter has been looking into certain reimbursements made to Legendary Capital REIT III, LLC, as well as at disclosures involving reimbursement procedures and policies. 

Allegedly Unsuitable Recommendations Caused Senior Investor Loss of Savings

A Brunswick, Georgia retiree has filed a Financial Industry Regulatory Authority (FINRA) arbitration case against broker-dealer MML Investors Services, LLC. The investor contends that a broker from the firm overconcentrated his IRA and a non-IRA account in CNL Lifestyle Properties, which is an illiquid, privately traded real estate investment trust (non-traded REIT). 

This caused him to lose a large portion of his savings. Now, the investor is alleging failure to supervise, unauthorized transactions, securities fraud, broker negligence, breach of duty, breach of contract, violation of state securities laws, and other claims.  He is seeking up to $100K plus interest and costs.  

Investors That Bought NYC Stock When it Was a Non-Traded REIT Hit Especially Hard After NYSE Listing

Our real estate investment fraud attorneys (REIT) at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) are investigating the broker-dealers and investment advisors that sold New York City REIT (NYC)  to customers. 

Now available on the New York Stock Exchange (NYSE) and open to any investor with a brokerage account, this real estate investment trust used to be a non-traded REIT and it is the investors that purchased this non-traded real estate trust that have sustained the most significant losses after it went public in August 2020. 

Resource Real Estate Opportunity REIT and REIT II Shares Reportedly Trading Under NAV Price 

With shares in Resource Real Estate Opportunity REIT and Resource Real Estate Opportunity REIT II reportedly trading privately at lower prices than their net asset value (NAV), some investors may be wondering why they were never fully apprised of all the risks.

The news of the lower than NAV trading prices comes several months after both non-traded real estate investment trusts announced they were partially suspending share redemptions amidst their plans to merge with Resource Apartment REIT III, Inc.

Latest FINRA Arbitration Claim Allege REIT Losses 

A number of investors recently filed a customer complaint against former Kalos Capital broker, Curtis Leroy Whipple, who was with the firm out of Plymouth, Michigan until this year.  He faces allegations of unsuitability, misrepresentations, and lack of due diligence related to the claimants’ United Development Funding IV (UDF IV) losses. 

UDF IV is a real estate investment trust (REIT) that mostly invests in secured loans for acquiring and developing land into single-family home lots, as well as to construct homes and model homes.  UDF IV and the other UDF non-traded REITs have been accused in recent years of being part of a $1B Ponzi scam. United Development Funding is based out of Dallas, Texas. 

Non-Traded Real Estate Investment Trusts Are Risky, Illiquid 

If you are a retail investor in San Francisco whose broker is recommending that you invest in non-traded real estate investment trusts (non-traded REITs), you should strongly reconsider. 

While often touted as a security that allows investors to make money without having to worry about market volatility – this type of investment is actually still high risk, illiquid, and not suitable for many customers including retail investors, retirees, and other conservative investors with low-risk tolerance levels.

Elderly Investor Alleges Unsuitable Investment Recommendations Caused REIT Losses

An Oklahoma retiree is seeking up to $500K in damages for investment losses she suffered while working with Kovack Securities broker, Susan Penney. 

The claimant contends that Penney and the broker-dealer misled her and made unsuitable recommendations when they persuaded her to invest a huge portion of her portfolio in non-public Real Estate Investment Trusts (REITs) and other risky investments that an inexperienced investor like her should never have been involved in.

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. 

What Are REITs?

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. 

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