Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses in CommonWealth REIT. CommonWealth REIT recently announced that it would commence a public offering intended to pay down as much as $450 million in senior notes. The public offering would be for 27 million shares of stock, which would dilute its outstanding share count by almost 30 percent.
The CommonWealth real estate investment trust primarily owns and operates real estate, such as industrial buildings, office buildings and leased industrial land. Following the announcement for CommonWealth REIT’s fourth-quarter earnings results and the 27 million share offering, the REIT’s price dropped by as much as 11 percent. According to the fourth-quarter report, a loss of $1.96 million was reported by the company as a result of a $168.6 million asset impairment.
Furthermore, between January 10, 2012 and August 8, 2012, CommonWealth allegedly issued false and misleading statements regarding its financial standing and prospects which, if proved to be true, would be a violation of the Securities Exchange Act of 1934. Furthermore, in an announcement on August 8, 2012, CommonWealth stated that it would likely be reducing its dividend payment. Investment fraud lawyers also note that from 2008 to 2011, the company’s net income fell from $244.65 million to $109.98 million, a decline of $134.67 million. For more information on this issue, see the previous blog post, “CommonWealth REIT Investors Could Recover Losses.”
Securities arbitration lawyers are also investigating the possibility that full-service brokerage firms may be held liable for the recommendation of CommonWealth REIT. Financial Industry Regulatory Authority rules have established that brokers and firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. REITs are often highly leveraged and may not be suitable for many investors.
If you purchased shares in CommonWealth REIT and suffered significant losses as a result, you may be able to recover your losses through Financial Industry Regulatory Authority arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.