According to securities fraud attorneys, many investors may be unaware of the fact that they have suffered losses in non-traded real estate investment trusts, or REITs. Financial statements for REITs usually reflect the investment’s initial purchase price, not the current value of the REIT; this can mislead investors into believing that their investment’s value is stable when, in fact, they have actually suffered significant losses.
Because these investments are unregistered securities, they do not have to follow the same rules that regulated investments must follow. As a result, investors may be subject to high fees both to get in and get out of the investment. Furthermore, non-traded REITs are inherently risky and illiquid, causing them to be difficult to value. Stock fraud lawyers say the nature of these investments makes them difficult to sell, which can cause problems for investors who need access to cash (such as retirees), making REITs clearly unsuitable for such investors.
Unfortunately, even diligent investors who carefully review their financial statements can’t depend on this information to reflect the true value of their non-traded REIT investment. Instead, investors will have to do some research to determine their investment’s value. Securities fraud attorneys are currently investigating many non-traded REITs sold by LPL Financial, Ameriprise Financial and other full-service brokerage firms, including KBS REIT, Inland American, Dividend Capital Total Realty, Cole Credit Property Trust II and III, Wells Real Estate Investment Trust II, Cole Credit Property 1031 Exchange and W.P. Carey Corporate Property Associates 17. For more information on these investigations, see the previous blog posts, “Ameriprise REIT Sales Under Investigation” and “LPL Financial Faces New Complaint Regarding Non-traded REIT Sales.”
If you have suffered significant losses as a result of your investment in a non-traded REIT, or the recommendation to purchase a non-traded REIT was unsuitable given your age, risk tolerance or investment objectives, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a no-cost, confidential consultation.