Securities fraud attorneys are currently investigating claims on behalf of investors who have suffered significant losses as a result of their investment in Wells or Paladin Realty Income Properties REITs.
Reportedly, investors were recently told by Paladin Reality Income Properties Inc. that its stock would cease to be sold next month because its current scale cannot cover expenses. This comes after it raised, in more than four years, $78.7 million. Reports about Wells Real Estate Funds state that, in an attempt to cut costs, the firm laid off its executive sales staff recently. This is not a good sign for investors, who are hoping their investment will rebound after dividend cuts and price drops.
Securities fraud attorneys have stated that as illiquid, non-traded investments, many REITs are not a suitable investment for all investors. Financial Industry Regulatory Authority rules have established that 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. Furthermore, brokerage firms must, before approving an investment’s sale to a customer, conduct a reasonable investigation of the securities and issuer.
The commission paid to brokers on REITs is typically high in comparison to other investments. Often, the commission is as high as 15 percent, which is why many stockbrokers are motivated to recommend the investment despite unsuitability.
Recently, there have been many non-traded REITs under investigation. Some of the non-traded REITs currently being investigated by the securities arbitration lawyers at CJ Gray are Inland Western, Inland American, KBS REIT, Cornerstone Healthcare REIT and Behringer Harvard REIT.
If you suffered losses as a result of an unsuitable recommendation of Paladin Realty Income Properties, Wells Real Estate Funds or another risky REIT, you may have a valid securities arbitration claim. 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.