Lightstone IV, formerly known as Lightstone Real Estate Income Trust, Inc., changed names on September 15, 2021. Lightstone IV, a public, non-traded REIT, reportedly focuses on investing in debt obligations that finance development or redevelopment opportunities, originate mezzanine loans or preferred equity investments in development projects, and participates in loan portfolios with third parties.

According to data from secondary sales websites, shares of the REIT have been listed for sale at prices between $3.40 and $4.00 a share. Shares were originally sold for $10 per share. According to filings on March 18, 2022, the board of directors approved an estimated value per share of $8.58 per share based on assets less the estimated value of liabilities divided by the number of shares outstanding.

According to its website, Lightstone has offered investors “the opportunity to invest in a diversified portfolio of real estate through its various public non-traded REIT offerings.”

On March 25, 2020, the Lightstone’s Board of Directors determined to suspend regular monthly distributions for months ending after March 2020, according to filings with the SEC, citing market volatility due to the Coronavirus pandemic.

Non-traded REITs pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors and stockbrokers who recommend these complex investments. One significant risk associated with non-traded REITs has to do with their high up-front commissions, typically between 7-10%. In addition to high commissions, non-traded REITs generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%.

Furthermore, non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market. As in this case, third party tender offers may also offer liquidity, but at a price that may or may not reflect the shares’ fair value.

Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks.

Investors with questions about claims against a stockbroker or investment advisor concerning Lightstone IV or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

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.

AHR was formed after a merger of Griffin-American Healthcare REIT III, Inc. and Griffin-American Healthcare REIT IV, Inc. in a merger that also involved the acquisition of the REITs’ sponsor and advisor, American Healthcare Investors LLC.

AHR reportedly has a 19.1 million-square-foot portfolio of 300 medical office buildings, skilled nursing facilities and integrated senior health campuses located in 36 states, the United Kingdom and the Isle of Man, in addition to a real estate-related investment. The gross investment value of the portfolio is reported to be approximately $4.4 billion. AHR filed a Form S-11 with the U.S. Securities and Exchange Commission (SEC) back in September 2022 announcing a plan to undertake an underwritten public offering of the REIT’s shares as well as a listing of AHR’s common stock on the New York Stock Exchange.

Non-traded REITs pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors and stockbrokers who recommend these complex investments. One significant risk associated with non-traded REITs has to do with their high up-front commissions, typically between 7-10%. In addition to high commissions, non-traded REITs generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%.

Furthermore, non-traded REITs are generally illiquid investments. Unlike traditional stocks and mutual funds, non-traded REITs do not trade on a national securities exchange. Many uninitiated investors in non-traded REITs have come to learn too late that their ability to exit their investment position is limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor on a limited basis, and often at a disadvantageous price, or through sales in a limited secondary market. As in this case, third party tender offers may also offer liquidity, but at a price that may or may not reflect the shares’ fair value.

Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks.

Investors with questions about claims against a stockbroker or investment advisor concerning AHR or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

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.

Initially offered as a non-traded REIT, Necessity REIT’s offering raised more than $1.6 billion in investor equity. Stockbrokers and financial advisors who sell non-traded REITs and other non-conventional investments have an obligation to recommend these investments only when they have a reasonable basis to recommend them to an individual customer. Advisors also may not sell non-traded REITs or other investments via a misleading sales presentation that omits to disclose material risks. A hallmark of non-traded REITs is their high up-front commissions, typically between 7-10%, which many investors may overlook at the time of purchase, and which may motivate financial advisors to recommend non-traded REITs instead of lower-commission alternatives such as publicly-traded REITs and ETFs.

As of Sept. 30, 2022, Necessity REIT reportedly owned 1,050 properties, comprised of 28.8 million rentable square feet, which were 92.6% leased, including 939 single-tenant net leased commercial properties, 900 of which are retail properties, and 111 multi-tenant retail properties.

Investors with questions about claims against a stockbroker or investment advisor concerning Necessity REIT or other non-traded REITs or non-conventional investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

Investors in Woodbridge, either through a First Position Commercial Mortgage (commonly referred to as a “FPCM” or “note”) or in any Woodbridge “units” upon the recommendation of former broker David Ferdwerda (CRD# 832431) may be able to recover your losses through securities arbitration. As recently disclosed by FINRA, as of October 30, 2018, FINRA barred registered representative David Carl Ferdwerda (“Ferdwerda”) from the securities industry due to his purported failure to provide requested documents and information to FINRA concerning his sales of Woodbridge securities.

According to publicly available FINRA records, from 2012 through March 2018, Mr. Ferdwerda was affiliated with broker-dealer Signator Investors, Inc. (BD No. 468) (“Signator”) in the firm’s Grand Rapids, MI office. Further, FINRA BrokerCheck indicates that Mr. Ferdwerda was discharged from his employment with Signator on or about March 20, 2018 due to his alleged “Involvement in the sale of unapproved outside investments in violation of firm policy.” Through his alleged nonresponsiveness to FINRA Enforcement’s investigation, Mr. Ferdwerda neither admitted nor denied FINRA’s findings.

As has been alleged by the SEC, Woodbridge and its owner and former CEO, Mr. Robert Shapiro, purportedly “used his web of more than 275 Limited Liability Companies to conduct a massive Ponzi scheme raising more than $1.22 billion from over 8,400 unsuspecting investors nationwide through fraudulent unregistered securities offerings.” According to Steven Peiken, Co-Director of the SEC’s Enforcement Division, the Woodbridge “[b]usiness model was a sham. The only way that Woodbridge was able to pay investors their dividends and interest payments was through the constant infusion of new investor money.”

Pursuant to FINRA Rule 3280(b), registered representatives are prohibited from participating in private securities transactions, without first providing written notice to their employer firm. Such written notice must set forth in detail the proposed transaction, as well as the financial advisor’s proposed role with regard to the contemplated transaction, and furthermore, whether he or she will receive any compensation in connection with the transaction

Regardless of whether Mr. Ferdwerda’s alleged outside business activity was conducted without Signator’s knowledge, employers in the securities industry have an affirmative duty to ensure that their brokers are adequately supervised. Accordingly, brokerage firms must take reasonable steps to ensure that their employees follow all applicable securities rules and regulations, as well as adhere to the firm’s internal policies and procedures. In instances when brokerage firms fail to adequately supervise their brokers, they may be held liable for losses sustained by investors.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience representing investors in connection with alleged securities fraud, including Ponzi schemes. Investors may contact us via the contact form on this website, by telephone at (866) 966-9598, or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York and Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

Investors with losses in Healthcare Trust, Inc., a non-traded real estate investment trust (Non-Traded REIT), may have arbitration claims if a broker or advisor made a recommendation to purchase the shares without a reasonable basis or misled the customer as to the nature of the investment. Healthcare Trust is an investment trust that seeks to acquire a diversified portfolio of real estate properties. Healthcare Trust focuses primarily on healthcare-related assets, including medical office buildings, seniors housing, and other healthcare-related facilities.

According to secondary market providers that allow investors to bid and sell illiquid products such as Non-Traded REITs, shares of Healthcare Trust are selling for about $14.99 per share, representing a significant principal loss compared to the offering price of $25.00.

Many FINRA arbitration cases in recent years have involved direct participation products (DPPs), private placements, Non-Traded REITs, and other alternative investments. These products are almost always unsuitable for middle-class investors.

Further, studies have shown that non-traded REITs have historically underperformed even safe benchmarks, such as U.S. Treasury bonds, and have drastically underperformed publicly-traded REITs, indicating that non-traded REITs provide very poor investment returns relative to their risks.

Unfortunately for many investors in Healthcare Trust, it would appear that any attempt to exit their illiquid investment will incur a substantial loss. Aside from their illiquid nature, non-traded REITs also present significant additional risks. One of these risks has to do with their high cost. In most instances, non-traded REITs are sold through a network of independent broker-dealers and associated financial advisors, who earn steep commissions (ranging up to 10%) on sales of non-traded REITs to investors. In addition to the sales commission charged, non-traded REITs typically charge other expenses, including certain due diligence and administrative fees (that can range anywhere from 1-3%).

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience in representing investors who have incurred losses in connection with non-traded REITs, including recovering losses through FINRA arbitration, as well as litigation. Investors may contact our office at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation.

On June 30, 2017, the former CFO of American Capital Properties Inc. (“ARCP”), Brian Block, was found guilty of securities fraud and related crimes in connection with reporting false numbers in quarterly filings with the Securities and Exchange Commission (“SEC”). The verdict was handed down following a nearly three-week trial held in the U.S. District Court for the Southern District of New York. A jury returned the verdict less than a day after closing arguments. Mr. Block was convicted of one count of securities fraud, two counts of filing false reports with the SEC, two counts of filing false certifications, and one count of conspiracy.

In 2014, ARCP was set to file its financial statement for the second quarter, when an employee informed Block and Chief Accounting Officer Lisa McAlister that there was a methodological error in some of the firm’s calculations and that its average funds from operations (or AFFO, a key financial metric for real estate investment trusts) was overstated by roughly $0.03 per share. Despite this guidance, no corrective action was taken to address the issue of overstated AFFO. On October 29, 2014, ARCP shares plunged as much as 37% — effectively wiping out roughly $4 billion in market value — after the company publicly stated that certain of its employees had concealed accounting errors.

Following the $23 million accounting scandal, ARCP, a non-traded REIT sponsor, changed its name to VEREIT (from the Latin word “veritas” for truth).

Despite the promises of some industry professionals including financial advisors selling non-traded REITs as a safe, income-oriented investment vehicle, the facts do not align with the optimistic sales pitch. In actuality, non-traded REITs are very risky investments. One of the primary risks associated with non-traded REITs is their high cost, including significant up-front commissions (typically a 7% payout to the adviser and a 3% commission to the broker-dealer employing the financial advisor), as well as other due diligence and administrative costs. Another key risk associated with investing in non-traded REITs has to do with their illiquid nature. As a non-traded security, uninformed investors find out too late that they either cannot sell out of the investment (before a significant time horizon elapses), or if they do sell, it will be at a substantial loss through redemption to the issuer, or through an inefficient sale on a limited and fragmented secondary market.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience in representing investors who have sustained losses on non-conventional investments, including non-traded REITs, private placements, and direct participation programs. Investors may contact a securities arbitration lawyer at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation.

VGTel has been the subject of a recent SEC Complaint in the Southern District of New York (as of January 2016). Specifically, the SEC has alleged that, from 2012-2014, Mr. Edward Durante defrauded at least fifty unsophisticated investors in New England, Ohio and California of at least $11 million through the sale of VGTel securities. The Complaint alleges that Durante essentially controlled VGTel (which was little more than a shell company), and in furtherance of a fraudulent scheme, sold approximately six million shares of VGTel stock using several false names, including ‘Efran Eisenberg’ and ‘Ted Wise.’ Further, the SEC Complaint alleges that Mr. Durante bribed certain financial advisors in order to encourage these brokers to steer their clients into purchasing VGTel stock.

FINRA rules mandate that member firms implement and act upon reasonable safeguards and compliance programs designed to ensure proper supervision of a broker’s activities during the time a broker is associated with that particular brokerage firm. Accordingly, a brokerage firm that fails to properly supervise its registered representatives may well be liable for investment losses sustained due to the malfeasance or misconduct of certain brokers.

Further, a stockbroker or financial advisor must have a reasonable basis for any investment recommendation that he or she makes to a customer. FINRA Rule 2111 states that to make a recommendation, a stockbroker must “have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the [firm] or associated person to ascertain the customer’s investment profile.” Factors that affect a customer’s investment profile for purposes of determining suitability could include the customer’s age, investment portfolio, age, income and liquidity needs and risk tolerance.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience in recovering funds on behalf of investors who have suffered losses as a result of broker misconduct. Investors in VGTel stock or another similar investment may contact our office at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

According to the allegations, Luxtera was represented as a late stage equity, which means that it was due for an initial public offering (IPO) within 12-36 months. Additionally, the complaints report that First Allied indicated expected revenues in excess of $300 million, when in reality the company had not achieved sales above $1 million.

This is not the first time stockbroker arbitration lawyers have received complaints regarding First Allied and private equity investments. If you suffered significant losses as a result of doing business with Rami Yahalom or First Allied, or received an unsuitable recommendation of advanced private equities from another stockbroker or financial advisor, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at the Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.