Investor Lawyers Blog

Published on: September 29, 2023

Moody National REIT II Subject of Mini Tender Offer- Secondary Market Pricing Suggests Investors Have Substantial Losses

Investors in Moody National REIT II (sometimes referred to below as “Moody REIT II”) may have FINRA arbitration claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor.

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In August 2023, an Israel-based investment fund has reportedly extended an offer to purchase up to 675,000 shares of Class A common stock and up to 25,000 shares of Class T common stock of the company at a price of $10.86 per share. Moody REIT II officially estimated that its net asset value (NAV) per share is $19.45 as of December 31, 2022. In October 2023, another tender offer for $11.57 a share was announced.

Shares of Moody REIT II were originally offered to public investors by brokers for $25 per share, but shares have reportedly sold in 2023 for as low as $6.60 per share in the limited secondary market. In April 2020, Moody REIT II reportedly terminated its IPO and suspended its offering, distributions, and share repurchase program. By anyone’s calculation, it appears that investors in Moody REIT II have incurred losses of principal.

Published on: September 28, 2023

Silver Star Properties REIT Indirect Subsidiary Files Bankruptcy Petition

by InvestorLawyers

Investors in Silver Star Properties REIT Inc. (“Silver Star”, formerly known as Hartman Short Term Properties XX Inc.), may have FINRA arbitration claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor.

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Silver Star announced earlier this month that Hartman SPE LLC, an indirect subsidiary that owns legacy office, retail and industrial properties, filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code.

The bankruptcy filing comes after what Silver Star calls “failed efforts” to negotiate with Hartman vREIT XXI Inc. which is under the control of Allen Hartman. Allen Hartman was recently named interim chief financial officer of Hartman vREIT XXI.

Published on: August 30, 2023

American Healthcare REIT, Inc. Shares Can Be Sold For Equivalent of $2.13/share- Investors May Have Claims

by InvestorLawyers

Investors in American Healthcare REIT Inc. (sometimes referred to below as “AHR”) may have FINRA arbitration claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor.

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Shares in the American Healthcare REIT were recently the subject of a mini tender offer to purchase Class T and Class I common sharers of the REIT for $8.50 per share, which equates to $2.13 a share after accounting for the November 2022 four-for-one reverse stock split in AHR shares. AHR’s Board of Directors announced it was neutral concerning these unsolicited offers.

Despite this neutrality, the tender offer is for a per share consideration far below AHR’s published estimated net asset value (NAV) per share of $31.40 as of December 31, 2022.

Published on: August 29, 2023

Silver Star Properties REIT Subject of SEC Investigation- Investors May Have Claims

by InvestorLawyers

Investors in Silver Star Properties REIT Inc. (“Silver Star”, formerly known as Hartman Short Term Properties XX Inc.), may have FINRA arbitration claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor.

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According to an online publication, the U.S. Securities and Exchange Commission (“SEC”) has reportedly initiated an investigation regarding Silver Star, as disclosed by a letter the company reportedly received from the SEC. The SEC reportedly has inquired about Silver Star’s removal of Allen Hartman, former executive chairman of the company, as well as Silver Star’s reported investigation into “certain violations of fiduciary and other duties to Silver Star by Hartman.” The SEC also has reportedly inquired about the recent resignation of Mark Torok as chief executive officer of Silver Star. Torok resigned in May, less than a month after reaching a long-term employment agreement with Silver Star’s the board of directors. Silver Star has previously stated in SEC filings that it had material weaknesses in controls over the review, approval and disclosure of related party transactions and the insufficient design of controls relating to the timing of revenue recognition of estimated recoveries of operating expense items under leasing agreements.

Previously, in June 2023, Silver Star issued a warning regarding its ability to continue as a going concern due to questions concerning Silver Star’s ability to refinance its debts. In March 2023, the executive committee of Silver Star’s board removed Allen Hartman, founder, as executive chairman of the company.

Published on: February 1, 2023

Investors In The Necessity Retail REIT, Inc. (Formerly AFIN) May Have Arbitration Claims

by InvestorLawyers

Investors in The Necessity Retail REIT, Inc. (“Necessity REIT”), formerly known as American Finance Trust, Inc. (AFIN) and, before that, as American Realty Capital Trust V, Inc., may have FINRA arbitration claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor.

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Necessity REIT listed its shares on Nasdaq Global Select Market (“Nasdaq”) under the ticker symbol “AFIN” effective July 19, 2018. The Company later changed its name to The Necessity Retail REIT and adopted the ticker symbol “RTL” in February 2022. Before listing its shares on Nasdaq, Necessity REIT (then known as American Finance Trust) published an “estimated per share” net asset value of $23.56 in June 2018- leaving investors surprised when the REIT’s shares plummeted in value after being listed on Nasdaq only a month later in July 2018. The REIT’s shares have continued to languish, and as of January 2023, Necessity REIT shares were trading at below $7.00 a share- meaning that investors who bought shares in the initial offering would have lost well over half of their initial investment.

More recently, an investor in Necessity REIT known as Blackwells Capital, LLC (“Blackwells”) has called for corporate governance changes and new directors for the REIT. According to a recent news article, Blackwells reportedly notes that Necessity REIT trades at a 68.5% discount to its net asset value or “NAV” which, according to Blackwells, represents poor performance relative to comparable REITs. Blackwells reportedly filed a lawsuit against Necessity REIT in December, 2022, challenging Necessity REIT’s interpretation of the meaning of a July 2022 bylaw amendment concerning the appointment of directors to the REIT’s board. Blackwells has nominated two candidates for the Necessity REIT’s board, who have been rejected by the REIT, precipitating the lawsuit.

Published on: January 31, 2023

Customers Of Anthony “Tony” Liddle, Barred Wausau, WI Broker, May Have Arbitration Claims

by InvestorLawyers

Investors who believe they were defrauded or had they accounts mishandled by Anthony Liddle of Wausau, Wisconsin, may have legal claims, including possible claims for unsuitable recommendations or for misrepresentations, if the nature of the investments recommended by Liddle was misrepresented or if Liddle solicited money under false pretenses.

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In January, 2023, the Securities and Exchange Commission (“SEC”) charged Liddle with allegedly defrauding at least 13 investment advisory clients of approximately $1.9 million. The SEC’s complaint alleges that Liddle, while acting as an investment advisor, made misrepresentations to clients, many of whom were seniors. Liddle purportedly directed some investment advisory clients to send money directly to his investment advisory company, where Liddle allegedly misappropriated client funds and never invested the money on his clients’ behalf. The SEC’s complaint is accessible here. LiddleSECComplaint

Earlier, in June 2022, the Financial Industry Regulatory Authority (FINRA) barred Liddle (CRD#: 5478479) from associating with any FINRA member at any time after Liddle reportedly refused to provided information in its investigation to reports that Liddle allegedly borrowed more than $1.8 million from at least 13 of his customers while he was associated with his member firm, according to FINRA. The FINRA bar is accessible here. LiddleAWC

Published on: December 7, 2022

Shareholders of Lightstone Value Plus REITs I, II and III May Have Arbitration Claims

by InvestorLawyers

Shareholders in Lightstone Value Plus REIT I, Inc., Lightstone Value Plus REIT II, Inc., and/or Lightstone Value Plus REIT III, Inc. (sometimes referred to below as the “Lightstone REITs”) may have FINRA arbitration claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor.

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The Lightstone REITs were sold to the public during various periods dating back to 2006 (Lightstone I), 2009 (Lightstone II), and 2014 (Lightstone III), respectively. Despite the passage of years- over fifteen years in the case of Lightstone I- none of the three Lightstone REITs has been listed on a public exchange or otherwise become liquid.

Recently, the Lightstone REITs solicited proxies seeking shareholder approval for key charter amendments including:

Published on: December 6, 2022

VII Peaks Co-Optivist Income BDC II Investors May Have Arbitration Claims

by InvestorLawyers

Investors in VII Peaks Co-Optivist Income BDC II (“VII Peaks BDC”) may have FINRA arbitration claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor.

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In 2021, the Securities and Exchange Commission (“SEC”) announced settled charges against investment adviser VII Peaks Capital, LLC (“VII Peaks Manager”) and its co-owner and managing member, Gurprit Chandhoke (“Chandhoke”), for breaching their fiduciary duty by engaging in transactions that benefitted themselves to the detriment of VII Peaks BDC, a business development company (BDC) managed by VII Peaks Manager.

According to the SEC’s order, from late 2015 through 2017, VII Peaks Manager and Chandhoke breached their fiduciary duty to VII Peaks BDC by engaging in transactions that were not disclosed to or approved by the Board of Directors of the BDC. The SEC charged that VII Peaks Manager collected over $722,500 in due diligence fees for loans made by the BDC to various portfolio companies, even though the loan documentation said that the fees belonged to the BDC. The SEC also charged that VII Peaks and Chandhoke caused VII Peaks BDC to make loans to portfolio companies in order to generate the fees for themselves.

Published on: December 5, 2022

Investors In Shopoff Land Funds and Other Private Placements May Have Arbitration Claims

by InvestorLawyers

Investors in private placement securities including Shopoff Land Funds and other private placement securities may have legal claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor.

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Shopoff Land Funds and other private placement investments are generally categorized as alternative investments and may be unsuitable for many inexperienced investors or those with a modest net worth. Private placements are investments that are not publicly registered with the Securities and Exchange Commission that are offered via various exemptions from registration that permit the sales. Sales of certain private placements including those offered under an exemption known as “Regulation D” are largely limited to sales to “accredited investors” who meet certain eligibility criteria established by the Securities and Exchange Commission (SEC). For example, an investor would be accredited if they had a net worth over $1 million, excluding primary residence (individually or with spouse or partner) or income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expects the same for the current year. Investors can also be deemed accredited based upon professional experience.

Shopoff private placement offerings have reportedly included the following:

Published on: December 3, 2022

Investors In Madison Funding I and Poet’s Walk Funding I May Have Arbitration Claims

by InvestorLawyers

Investors in private placement securities including Madison Funding I bonds and Poet’s Walk Funding I bonds, may have legal claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor.

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The brokerage firm Herbert J Sims & Co., a/k/a HJ Sims reportedly offers to investors a number of private placement investments that the firm itself structures and establishes. For example, a private placement known as Madison Funding I, LLC was brought to market in 2019 by HJ Sims and issued $5,115,000 in bonds due June 1, 2024. The Madison Funding I bonds reportedly defaulted on principal payments due March 2, 2021 and have paid reduced interest since. Despite the default, Madison Funding I bonds are reportedly shown as having a full value of $100 on customer account statements.

In another private placement offering, Poet’s Walk Funding I, LLC, $10,000,000 in bonds were reportedly sold to the public. These bonds have reportedly also defaulted and have paid reduced interest.