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.
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 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.