Investors Who Suffered Losses as a Result of W.P. Carey REIT May Have Valid Securities Arbitration Claim

by InvestorLawyers on March 7, 2012

in FINRA,Securities Fraud,Suitability

Investors of W.P. Carey REIT may be able to recover losses through securities arbitration, investment attorneys say. A recent Financial Industries Regulatory Authority (FINRA) announcement stated that it is paying close attention to the way REITs are being marketed and sold by broker-dealers. In many cases, brokers made unsuitable recommendations of REITs and marketed the investments as safe, despite the risk level of the investments.

Investors Who Suffered Losses as a Result of W.P. Carey REIT May Have Valid Securities Arbitration Claim

Typically, REITs carry a high commission, which motivates brokers to make the recommendation to investors despite the investment’s unsuitability. The commission on a non-traded REIT is often as high as 15 percent. Non-traded REITs, such as the W.P. Carey REITs, carry a relatively high dividend or high interest, making them attractive to retired investors.

However, non-traded REITs are inherently risky and illiquid, which limits access of funds to investors. This becomes a major problem for investors, especially retired individuals, who may need to access their funds when the need arises. In addition, frequent updates of the investment’s current price are not required of broker-dealers, causing misunderstandings about the financial condition of the investment. Because frequent updates are not required, investors may believe the REIT is doing much better than it actually is.

The W.P. Carey REITs that are currently being investigated include Carey Institutional Properties, Corporate Property Associates 10, Corporate Properties Associates 12, Corporate Properties Associates 14, Corporate Properties Associates 15 and Corporate Properties Associates 16.
W.P. Carey REIT investments were offered by W.P. Carey & Co. LLC, but this is by no means the only REIT for which brokers may have made unsuitable recommendations.

If you invested in a W.P. Carey REIT, or any other REIT that you believe was unsuitably recommended to you, you may be able to recover losses by filing a claim with FINRA. To find out more about your legal rights and options, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

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