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Articles Tagged with United Realty Trust

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Investors in First Capital Real Estate Trust (“First Capital”), a publicly registered, non-traded real estate investment trust (formerly known as United Realty Trust) 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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First Capital REIT’s public offering was active between August 2012 and April 2016, although it has not file a quarterly financial report since the second quarter of 2015, nor has it filed an annual report since 2014.

As the foregoing delinquencies suggest, First Capital has been a slow motion train wreck for over five years.   In a January 2016 Securities and Exchange Commission (“SEC”) filing, the REIT stated that it was not moving forward with a 12-hotel acquisition because the hotel principals could not procure the necessary approvals for the transaction.  In a complaint, the SEC claims that the filing was materially misleading  because the potential transaction was not one that the REIT merely decided “not to move forward with” but instead the transaction allegedly foundered because First Capital’s then-CEO, Suneet Singal (“Singal”), did not actually own certain hotel properties that he had pledge to contribute.

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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.

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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.

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