The Securities and Exchange Commission (SEC) has charged Suneet Singal (“Singal”) with fraud relating to First Capital Real Estate Trust Inc. (“First Capital”), a non-traded real estate investment trust formerly known as United Realty Trust. Singal is the CEO and Chairman of First Capital.
Prior to Singal’s involvement, First Capital, then known as United Realty Trust, was reportedly sold to public investors by broker dealers, and held out as a safe income investment that would provide distributions and also return investors’ principal after a period of years. But First Capital was in fact a risky and illiquid non-traded REIT. First Capital paid upfront sales commissions and dealer-manager fees totaling 10% of the REIT’s $11.00 a share offering price. These enormous commissions and fees dwarf the commissions available to brokerages and brokers on the sale of conventional investment products.
While it has publicized a net asset value (NAV) in excess of its offering price, First Capital has not filed public financial reports with the SEC on Forms 10-Q and 10-K since August of 2015, leaving investors to guess as to the true value of their shares.