NorthStar Healthcare Income, Inc. (“NorthStar Healthcare”) is a public, non-traded REIT formed in October 2010 as a Maryland corporation. NorthStar Healthcare is in the business of acquiring a geographically diverse portfolio of various healthcare real estate assets, including equity and debt investments (including various joint ventures with other non-traded REITs) in the mid-acuity senior housing sector, as well as in memory care, skilled nursing, and independent living facilities. Pursuant to its initial offering, which closed on February 2, 2015, the non-traded REIT raised gross proceeds of $1.1 billion (subsequently, NorthStar Healthcare conducted a Follow-on Primary offering, raising total gross proceeds of $1.9 billion through March 22, 2017).

As a publicly registered, non-traded REIT, numerous retail investors were solicited by a financial advisor to invest in NorthStar Healthcare. Unfortunately, customers who purchased shares through the IPO upon the recommendation of a broker may, in some instances, have been uninformed of the complex nature of the investment, including its high upfront commissions and fees (as set forth in its prospectus, NorthStar Healthcare charged investors a selling commission of up to 7% of gross offering proceeds, a dealer-manager fee of up to 3%, and an acquisition fee of 2.25% for properties acquired by the REIT).

Furthermore, as a non-traded REIT, NorthStar Healthcare is illiquid in nature. Investors seeking liquidity have limited options at their disposal in the event that they wish to exit their investment position in the near term. Briefly, investors seeking liquidity may: (i) seek to redeem their shares directly with the sponsor (it is worth noting that NorthStar is “not obligated to repurchase shares” under its Share Repurchase Program), or (ii) be presented with limited, market-driven opportunities to tender their shares to a third party professional investment firm (typically at a disadvantageous price), or finally, (iii) seek to sell their shares on a limited secondary market specializing in creating a market for illiquid securities.

Any investment program recommended by a broker which includes any significant concentration of illiquid investments, including non-traded REITs, business development companies (BDCs), or private placement offerings, is likely unsuitable for the average, retail investor. Recently, shares of NorthStar Healthcare were trading on a secondary platform at a bid-ask spread of $5.30 – $5.50 per share. For investors who acquired their shares though the IPO at $10 per share, such disadvantageous pricing suggests investors who sell on such a secondary market will sustain considerable losses of approximately 45% on their investment, excluding distributions.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience representing investors in connection with complex non-conventional investments, including non-traded REITs and BDCs. 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).

As recently announced, the board of directors of Hines Real Estate Investment Trust, Inc. (“Hines REIT” or the “Company”) — one of three publicly registered non-traded REITs sponsored by Hines — has unanimously voted for approval of a plan of liquidation and dissolution of the Company (“Liquidation Plan”). Under the Liquidation Plan, which calls for shareholder approval, the Company will sell seven of its West Coast office building assets in a cash transaction valued at $1.162 billion to an affiliate of Blackstone Real Estate Partners VIII. In addition, Hines REIT also seeks to liquidate the remainder of its portfolio, including Chase Tower in Dallas, TX, 321 North Clark in Chicago, and a grocery-anchored retail portfolio located in the Southeastern U.S.

Pursuant to the Liquidation Plan, Hines REIT shareholders will receive $0.08 per share, to be paid on or about July 31, 2018. Specifically, the Liquidation Plan entails a final distribution of $0.07 per share, as well as an additional $0.01 per share stemming from a recent class action settlement. The class action settlement involves a lawsuit filed by Baltimore City in the Circuit Court of Maryland, alleging breach of fiduciary duty, waste of corporate assets, and misappropriation of assets surrounding certain payments made in connection with the Liquidation Plan.

Hines REIT shareholders previously approved the Liquidation Plan in November 2016; subsequent to shareholder approval, the Company declared an initial liquidating distribution of $6.20 per share in December 2016, as well as a $0.30 per share liquidating distribution in April 2017. Following the final distribution of $0.08 per share, Hines REIT investors will have received total special and liquidating distributions of approximately $7.59 per share, in addition to regular annual distributions. Shares were originally sold for $10 each.

As a non-traded REIT registered with the SEC, Hines REIT was permitted to sell securities to the investing public at large, including numerous unsophisticated investors who bought shares through the initial public offering (“IPO”) upon the recommendation of a broker or money manager. Among the many risks associated with non-traded REITs are their characteristic high up-front fees and commissions (as high as 15% in some instances), as well as their illiquid nature. Most non-traded REITs are structured to experience a future ‘liquidity event’ — which might entail listing the shares on an exchange or liquidating the entire portfolio — although such an event will typically only occur after a number of years (e.g., 7 or more years) from initial investment.

If you have invested in Hines REIT, or another non-traded REIT, and you have suffered losses in connection with your investment (or are currently unable to exit your illiquid investment position without incurring considerable losses), you may be able to recover your losses in FINRA arbitration. Investors may contact a securities arbitration lawyer at 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.

As recently reported, third party real estate investment firms Everest REIT Investors I LLC and Everest REIT Investors III LLC, two private affiliated entities, commenced an unsolicited tender offer to purchase approximately 8.8 million shares of CNL Healthcare Properties, Inc. (“CNL Healthcare”) common stock for $7.50 each. Unless amended, this unsolicited tender offer will expire on August 31, 2018. As of December 31, 2017, CNL Healthcare reported a net asset value (NAV) of $10.32 per share. Thus, the recent tender offer pricing represents an approximate 27% discount on CNL’s recent NAV pricing and suggests that investors may have incurred principal losses on their investments.

Headquartered in Orlando, FL, CNL Healthcare is a Maryland REIT incorporated in June 2010 for the purpose of acquiring a portfolio of geographically diverse healthcare real estate real estate-related assets, including certain senior housing communities, medical office buildings, and acute care hospitals.

Investors in CNL Healthcare may have claims to bring in FINRA arbitration, if the investment was recommended by a broker or financial advisor who lacked a reasonable basis for the recommendation, or if the financial advisor misrepresented the nature of the investment, including its risk components.

Non-traded REITs like CNL Healthcare pose many risks that are often not readily apparent to retail investors, or adequately explained by the financial advisors who recommend these complex investments. To begin, one significant risk associated with non-traded REITs has to do with their high up-front commissions and fees, as high as 7-10% in some instances. In addition to high commissions, non-traded REITs generally charge investors for certain due diligence and administrative fees, ranging anywhere from 1-3%. Such high commissions and fees act as an immediate “drag” on investment performance.

Furthermore, non-traded REITs are generally illiquid investments. Unlike stocks and mutual funds, non-traded REITs do not trade on a deep and liquid national securities exchange. Therefore, many investors come to find out too late that their ability to exit their investment position is severely limited. Typically, investors in non-traded REITs can only exit their investment through redemption directly with the sponsor, and then on a limited basis, and often at a disadvantageous price. Or, investors may be able to sell shares through a limited and fragmented secondary market. Finally, investors may be presented with limited market-driven opportunities — such as a tender offer — to sell their shares.

Investors with losses in CNL Healthcare or other non-traded REITs 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.

Investors in Griffin Capital Essential Asset REIT, Inc. (“Griffin Essential”), may have substantial losses based on a tender offer to purchase shares for $6.89 a share — or $3.11 a share less than the offering price of $10 a share. As recently reported, on December 1, 2017, third-party real estate investment firm MacKenzie Capital Management (“MacKenzie”) made an unsolicited tender offer for shares of Griffin Essential at $6.89 per share, in cash. The Board of Directors of Griffin Essential has recommended that its shareholders reject the offer. However, the Board also advised that, as of September 30, 2017, its share redemption program (“SRP”) for 2017 was fully subscribed, thus leaving investors seeking liquidity via redemption with little recourse.

Griffin Essential is a Maryland REIT incorporated in August 2008 for purposes of acquiring a portfolio of geographically diverse single tenant properties across a wide range of industries. From 2009 – 2014, Griffin Essential conducted a series of offerings in connection with its capital raise. In aggregate, the non-traded REIT issued 126,592,885 shares of common stock for gross proceeds of approximately $1.3 billion. As a publicly registered non-traded REIT, Griffin Essential was permitted to sell securities to the investing public at large, including numerous unsophisticated retail investors who bought shares through the IPO upon the recommendation of a broker or money manager.

Investors who purchased shares of Griffin Essential through the offering acquired their shares for approximately $10 per share. Therefore, it would appear that investors who participated in the MacKenzie tender offer incurred substantial losses on their initial investment in excess of 30% (exclusive of commissions and distributions).

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. To begin, one significant risk associated with non-traded REITs has to do with their high up-front commissions and fees, as high as 15% in some instances. Furthermore, non-traded REITs are generally illiquid investments. Unlike stocks and mutual funds, non-traded REITs do not trade on a deep and liquid national securities exchange. Therefore, many investors in non-traded REITs come to find out too late that their ability to exit their investment position is severely limited. Typically, investors in non-traded REITs can only exit their investment position through redemption directly with the sponsor, and then on a limited basis, and often at a disadvantageous price. Or, investors may be able to sell shares through a limited and fragmented secondary market. Finally, investors may be presented with limited market-driven opportunities — such as a tender offer — to sell their shares.

Investors may be able to pursue claims through FINRA arbitration in the event that a non-traded REIT 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 broker. Investors may contact a securities arbitration lawyer at 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.

Investors in Benefit Street Partners Realty Trust, Inc. (“Benefit Street” or the “Company”) may have arbitration claims to be pursued before the Financial Industry Regulatory Authority (“FINRA”), 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 financial advisor. Benefit Street was formerly known as Realty Finance Trust; however, in September 2016, Realty Finance appointed Benefit Street Partners (“BSP”) as its new advisor, replacing former sponsor AR Global Investments.

Benefit Street is a publicly registered, non-traded real estate investment trust (“REIT”) that originates, acquires and manages a diversified portfolio of commercial real estate debt secured by properties located in the United States. Benefit Street is managed by BSP, a credit-focused alternative asset manager with over $20 billion of assets under management. Benefit Street commenced its operations in November 2012, and raised $786 millions in investor equity prior to closing its offering in January 2016. As of September 2016, the Company’s portfolio consisted of 73 loans and 7 CMBS investments.

In the years following the 2008 financial crisis, many retail investors were steered into investing in non-traded REITs such as Benefit Street by their broker or money manager based on the investment’s income-producing potential, in addition to the investment’s purported negative correlation to market volatility. Unfortunately, however, many investors were not informed of the complexities and risks associated with non-traded REITs, including the investment’s high fees (as high as 15% of the initial capital investment in some instances) and illiquid nature.

Currently, investors who wish to sell their shares of Benefit Street shares have limited options available to exit their investment position. For example, investors who wish to redeem their shares with the Company may encounter a scenario where they are limited in both time and scope as to the amount of shares they may redeem for cash consideration. As referenced in Benefit Street’s Form 10-K, in relevant part, as filed with the SEC for fiscal year ended December 31, 2017: “Repurchases pursuant to the [share repurchase program] generally will be made semiannually… Repurchases for any fiscal semester will be limited to a maximum of 2.5% of the weighted average number of shares of common stock outstanding during the previous fiscal year… Due to these limitations, we cannot guarantee that [we] will be able to accommodate all repurchase requests.”

Investors who purchased Benefit Street shares through the offering acquired shares at $25 per share. As of December 31, 2017, the Company’s Board has assigned a net asset value (“NAV”) of $19.17 per share to Benefit Street shares. Thus, it would appear that investors who are actually able to redeem some or all of their shares with the Company will lock in a loss of approximately 23%, excluding commissions paid in connection with the initial purchase and any distributions received to date.

Benefit Street investors seeking liquidity may also opt to sell their shares through limited market-driven events including tender offers. For example, according to publicly available information, third-party real estate investment firm MacKenzie Capital Management, LP (“MacKenzie”) made an unsolicited tender offer on or about March 13, 2017, for Benefit Street shares at a purchase price equal to $12.05 per share.

Investors with questions concerning possible claims involving non-traded REITs or other securities matters may contact a securities arbitration lawyer at 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.

Investors in American Realty Capital New York City REIT (“ARC NYC REIT”), may have arbitration claims to be pursued before the Financial Industry Regulatory Authority (“FINRA”), if their ARC NYC REIT 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 broker or financial advisor. According to its website, ARC NYC REIT is structured to provide its investors with a combination of current income and capital appreciation through strategic investments in high-quality commercial real estate located throughout the five boroughs of New York City.

As recently reported, the Board of ARC NYC REIT has elected to suspend distributions, effective March 1, 2018. According to the Board, the suspension of future distributions was made in order to enhance the non-traded REIT’s ability to execute on acquisitions, as well as conduct repositioning and leasing efforts related to its property portfolio. As a publicly registered non-traded REIT, ARC NYC REIT was incorporated in December 2013 and is registered with the SEC. Accordingly, ARC NYC REIT was permitted to sell securities to the investing public at large, including numerous unsophisticated retail investors who bought shares through the initial public offering (“IPO”) upon the recommendation of a broker or money manager at $25 per share. Secondary market transactions in ARC NYC REIT shares have reportedly taken place at prices of between $13.75 and $14.25 a share (although the sponsor indicates the NAV of ARC NYC REIT shares is $20.26 a share).

Unlike traditional stocks and publicly traded REITs, non-traded REITs do not trade on a national securities exchange. Therefore, many investors in non-traded REITs like ARC NYC REIT, have limited options when it comes to exiting their investment position. For example, investors in non-traded REITs typically can only redeem shares directly with the sponsor on a limited basis, and often at a disadvantageous price. Or, investors may be able to sell shares through a limited and fragmented secondary market. Finally, investors may be presented with limited market-driven opportunities — such as a tender offer — to sell their shares at a disadvantageous price.

In general, many non-traded REITs pose significant risks, including their initial structure, as well as the nature of the income paid to investors. As to their initial structure, many non-traded REITs are blind pools, meaning that an investor considering a capital commitment may have little or no no information as to the nature and quality of the assets to be purchased by the REIT. With respect to the nature of distributions paid by non-traded REITs, often distributions are paid to investors in part via “return of capital” rather than distribution of income from underlying assets, meaning that investors are essentially being paid back, in part, with their own initial capital contribution.

Investors in ARC NYC REIT, or another non-traded REIT who have suffered losses in connection with their investment (or are currently unable to exit their illiquid investment position without incurring losses) may contact a securities arbitration lawyer at 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.

CHARACTERISTICS AND SOME DISADVANTAGES OF NON-TRADED REITS

To begin, a non-traded REIT is not listed for trading on a securities exchange. Consequently, the secondary market for non-traded REITs is typically very limited in nature. Furthermore, while some of an investor’s shares may be eligible for redemption after a certain passage of time (e.g., one year), and, even then, on a limited basis subject to certain restrictions, such redemption offers may well be priced below the purchase price or current price of the non-traded REIT. Thus, lack of liquidity and pricing inefficiency are two disadvantages to non-traded REITs, as opposed to REITs that trade on an exchange (e.g., NYSE: BXP – Boston Properties).

Beyond such liquidity and pricing concerns, non-traded REITs often are sold with very high front-end fees. These fees may include selling compensation and expenses (not to exceed 10%), as well as additional offering and organizational costs which are essentially passed along to the investor from the outset. Conversely, purchasing a REIT which trades on a major exchange will only entail the associated brokerage commission. Because of the fees associated with non-traded REITs, they are rarely suitable for an investor with a short-term time horizon; even long-term investors must remain mindful of the liquidity issues.

Finally, with non-traded REITs, investors may not always be aware of the anticipated source of returns on the underlying investments. Often, with a non-traded REIT, income is passed along to the investors from distributions over several years – and it may also be the case that the income distributions include return of capital from other investors. And upon liquidation, investors in a non-traded REIT may receive less than their initial investment depending on the value of the underlying assets. On the other hand, investors who purchase exchange traded REITS are typically seeking capital appreciation on the share price, in addition to income via dividends or distributions to shareholders.

RESOURCE OFFICE INNOVATION REIT

Recently, one such non-traded REIT – Resource Office Innovation REIT (“Resource Office”) – elected to suspend its public offering, effective April 21, 2017. Resource Office’s suspension of its offering was approved by its Board in connection with a plan to restructure its $1.1 billion IPO into a NAV REIT, as well as a perpetual life entity that will give the company the ability to conduct offerings for indefinite duration. In addition to suspending its offering, Resource Office’s Board voted to suspend the company’s distribution reinvestment plan effective May 1, 2017, as well as its share repurchase program effective May 21, 2017.

If you have invested in a non-traded REIT that you believe was an unsuitable recommendation, and you have suffered significant losses as a result, you may be able to recover your losses in FINRA arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

VEREIT (formerly known as American Realty Capital Properties) is one of the largest real estate investment trusts (REITs) in the world. VEREIT was founded in 2010 and is based in Phoenix, Arizona.

In the complaint Vanguard alleges that VEREIT cost investors billions of dollars in a multiyear accounting fraud. From February 2013 to July 2014 VEREIT implemented an “acquisition strategy” purchasing seven major real estate companies at an average of $3 billion. VEREIT’s assets grew from $132 million to $21.3 billion in 2014. During this growth VEREIT allegedly assured investors that its internal controls “were effective” and that the company financial statements “were accurate and could be trusted.”

Investors allege that VEREIT actually did not have an adequate system of controls over its financial reporting and that company financial statements were “riddled with errors.” According to the complaint VEREIT hid its fraud from investors until Oct. 29, 2014 when it disclosed an audit report which “determined that the company ‘intentionally’ misreported and [had] ‘intentionally not corrected’ certain calculations and that prior statements by the company ‘should no longer be relied upon.” After the revelation VEREIT’s stock price fell by 36%.

Non-traded REITs, like VEREIT, carry greater risk than more traditional investments such as stocks and bonds. Because of the greater risk attached to these investments, they are better suited for sophisticated and institutional investors. Broker-dealers have the duty to conduct proper due diligence in order to determine if an investment is suitable for a customer. This includes looking at the investors age, risk tolerance, net worth and investment experience.

If you believe you have been the victim of a possible violation of the securities laws, you may wish to consult an attorney to find out more about your legal rights and options. Investors may contact a securities attorney at Law Office of Christopher J. Gray at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

Non-traded real estate investment trusts (REITs) are investments that pose a significant risk that the investor will lose some or all of his initial investment. Non-traded REITs are not listed on a national securities exchange, limiting investors’ ability to sell them after the initial purchase. Such illiquid and risky investments are often better suited for sophisticated and institutional investors, rather than retail investors such as retirees who do not wish to have their money tied up for years, or risk losing a significant portion of their investment. Non-traded REITs usually have higher fees for investors than publicly-traded REITs and can be harder to sell.

A partial list of non-traded REITs is as follows (not all of the REITs listed have performed poorly):

American Realty Capital – Retail Centers of America, Inc.

American Realty Capital Daily Net Asset Value Trust, Inc.

American Realty Capital Healthcare Trust II, Inc.

American Realty Capital Hospitality Trust, Inc.

American Realty Capital New York City REIT, Inc.

American Realty Capital Trust V, Inc.

Behringer Harvard Opportunity REIT I

Behringer Harvard Opportunity REIT II

Carey Watermark Investors Incorporated

Carter Validus Mission Critical REIT

CNL Growth Properties

CNL Healthcare Properties Inc.

CNL Lifestyle Properties, Inc.

Cole Credit Property Trust IV, Inc.

Cole Credit Property Trust V, Inc.

Cole Office & Industrial REIT

Cole Real Estate Income Strategy (Daily NAV), Inc.

Corporate Property Associates 17 – Global, Inc.

Corporate Property Associates 18 – Global

Dividend Capital Diversified Property Fund Inc.

Global Income Trust, Inc.

Griffin Capital Essential Asset REIT, Inc.

Griffin-American Healthcare REIT III

GTJ REIT, Inc.

Hines Global REIT, Inc.

Hines Real Estate Investment Trust, Inc.

Industrial Income Trust, Inc.

Inland Real Estate Income Trust, Inc.

InvenTrust Properties Corp.

Jones Lang LaSalle Income Property Trust, Inc.

KBS Legacy Partners Apartment REIT, Inc.

KBS Real Estate Investment Trust I, Inc.

KBS Real Estate Investment Trust II, Inc.

KBS Real Estate Investment Trust III

KBS Strategic Opportunity REIT, Inc.

Northstar Healthcare Income, Inc.

Northstar Real Estate Income II, Inc.

Northstar Real Estate Income Trust, Inc.

Phillips Edison Grocery Center REIT I, Inc.

Phillips Edison Grocery Center REIT II, Inc.

Realty Finance Trust, Inc.

RREEF Property Trust

Steadfast Income REIT

Strategic Realty Trust Inc.

TIER REIT Inc.

United Realty Trust, Inc.

Brokers and financial advisors are required to make investment recommendations that are consistent with their clients’ risk tolerance, net worth, investment objectives and experience in the market. However, due to the high sales commissions brokers typically earn for selling REITs – as high as 15%- brokers can be tempted to make “one size fits all” recommendations to investors in order to reap commissions. These high up-front fees and commissions can negatively affect performance over time, as illustrated by the estimated $50 billion that non-traded REITs have cost customers.

If you have suffered significant losses as a result of unsuitable recommendations of non-traded REITs or other non-conventional investments by a stockbroker or financial advisor, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact an investor rights attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

When the client expressed his concern about his declining account, he was told “even a skinny cow could give milk.” The arbitration panel wrote that the investor’s portfolio was “clearly unsuitable” and provided a lengthy explanation for their award, which pointed the finger at UBS’s sales practices and alleged that brokers were under pressure to sell the closed-end funds and keep clients in them. The arbitration panel wrote that “Claimant’s lifetime pattern has been one of frugality, saving and employment of resulting capital and his own labor in business opportunities that he understands can earn a good return.”

UBS was ordered to pay $400,000 to buy back the investor’s portfolio and pay $600,000 in compensatory damages. The investor’s request for $1 million in punitive damages was reportedly denied by the arbitration panel. The FINRA award is accessible here ubs puerto rico.

Many investors report that UBS and other brokerage firms in Puerto Rico sold these funds to investors as safe fixed-income investments. Of course, they have proved to be anything but safe, and many investors have lost much or even all of their retirement savings. Adding more danger, many investors who needed to withdraw money from their accounts for personal reasons (such as to purchase a home or fund a child’s education) have reportedly been advised to borrow money from UBS and other brokerage firms instead of selling shares in UBS Puerto Rico funds. This was very dangerous advice, because if the funds lost value, the investor’s losses would be even greater than they otherwise would have been due to the borrowings. Now that the funds have lost value, some investors have lost almost all of their investments, or even ended up owing the brokerage firms money!

Many advisors told investors that the UBS closed-ends were safe because they were invested in safe bonds backed by the government. But Puerto Rico municipal bonds have been anything but secure of late. Since 2000, the Commonwealth has experienced an imbalance between recurring government revenues and total expenditures. In 2009, the deficit reached a record $3.306 billion. Further, as of June 2010, the unfunded public employees’ retirement accounts reportedly had an actuarial shortfall totaling approximately $25 billion. As a result of these poor fundamentals, investors are concerned about the creditworthiness of the Puerto Rico government and as a result the prices of some Puerto Rico government bonds have dropped. UBS closed-end funds have lost significant value due to their leveraged exposure to the underlying municipal bonds as well as selling pressure in the market for the funds. Shares that steadily paid dividends and appeared to maintain their value for several years have suddenly collapsed in value by 50% or more. Some investors who borrowed money from credit lines offered by brokerage firms have reportedly received margin calls and even had their UBS Puerto Rico fund shares liquidated.

Which Funds Are Affected?: Clients who invested in the following funds may wish to consider attempting to recover their losses through the FINRA arbitration process: Tax-Free Puerto Rico Fund, Tax-Free Puerto Rico Fund II, Tax-Free Puerto Rico Target Maturity Fund, Puerto Rico AAA Portfolio Target Maturity Fund, Inc., Puerto Rico AAA Portfolio Bond Fund, Puerto Rico AAA Portfolio Bond Fund II, Puerto Rico GNMA & U.S. Government Target Maturity Fund, Puerto Rico Mortgage-Backed & U.S. Government Securities Fund, Puerto Rico Fixed Income Fund, Puerto Rico Fixed Income Fund II, Puerto Rico Fixed Income Fund III, Puerto Rico Fixed Income Fund IV, Puerto Rico Fixed Income Fund V, Puerto Rico Fixed Income Fund VI, Puerto Rico Short Term Investment Fund, Multi-Select Securities Puerto Rico Fund, UBS IRA Select Growth & Income Puerto Rico Fund, Puerto Rico Investors Family of Funds, Puerto Rico Investors Tax-Free Fund, Puerto Rico Investors Tax-Free Fund II, Puerto Rico Investors Tax-Free Fund III, Puerto Rico Investors Tax-Free Fund IV, Puerto Rico Investors Tax-Free Fund V, Puerto Rico Investors Tax-Free Fund VI, Puerto Rico Tax-Free Target Maturity Fund, Puerto Rico Tax-Free Target Maturity Fund II, Inc., Puerto Rico Investors Bond Fund I.

Attorneys are available to review possible cases involving UBS Puerto Rico closed-end funds. Investors who were not told the truth about these funds may have a claim against UBS or the firm that sold them the funds. In addition, investors who could not afford to take the risk of losing money in these funds may also have claims. Investors may fill out the form on this page to arrange to discuss their possible case. Investors may also contact the Christopher Gray firm in New York at (866) 966-9598 or newcases@investorlawyers.net for a confidential, no-obligation consultation.

Inland American is an enormous company- the largest of the giant non-traded REITS. The Company had raised a total of approximately $8.0 billion of gross offering proceeds as of December 31, 2008.

Inland American is a non-traded REIT, meaning that its shares are not listed on a national securities exchange. However, sales of shares in non-traded REITs, which file periodic reports with the Securities Exchange Commission as do listed companies, are not limited to accredited investors and shares are sold to the general public through brokers.

Non-traded real estate investment trusts (REITs) are highly risky products that pose a significant risk that the investor will lose some or all of his initial investment. Non-traded REITs are not listed on a national securities exchange, limiting investors’ ability to sell them after the initial purchase. Such illiquid and risky investments are often better suited for sophisticated and institutional investors, rather than retail investors such as retirees who do not wish to have their money tied up for years, or risk losing a significant portion of their investment.

Brokers and financial advisors are required to make investment recommendations that are consistent with their clients’ risk tolerance, net worth, investment objectives and experience in the market. However, due to the high sales commissions brokers typically earn for selling REITs – as high as 15%- brokers can be tempted to make “one size fits all” recommendations to investors in order to reap commissions. Brokerage firms are required by FINRA rules to supervise brokers and investment advisors- even those who work in independent branch offices- to ensure that the brokers make only suitable recommendations.

If you have suffered significant losses as a result of unsuitable recommedations of REITs or other non-conventional investments by a stockbroker or financial advisor, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact an investor rights attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

Reportedly, Pennsylvania regulators are currently looking into non-traded REIT sales conducted by Securities America employees. Securities America is owned by broker-dealer Ladenburg Thalmann & Co. Inc., which also owns two more independent brokerage firms. Ladenburg stated in its annual report that Pennsylvania regulators wanted to be provided with data regarding non-traded REITs purchased by Pennsylvania residents since 2007.

Securities arbitration lawyers are currently unsure if the non-traded REIT sales investigation will extend to firms other than Securities America.

Last year, multiple independent brokerage firms, including Securities America, paid to settle charges regarding non-traded REIT sales with the Massachusetts Securities Division. Securities America’s piece of that pie included a $150,000 fine and restitution to clients totaling $8.4 million. The Massachusetts probe found that several firms had trouble abiding state rules, as well as their own policies, regarding non-traded REIT sales.

According to investment fraud lawyers, 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 given their age, investment objectives and risk tolerance. Non-traded REITs are inherently risky and illiquid, which limits access of funds to investors and makes them unsuitable for many individuals with conservative risk tolerances and those who need easy access to funds.

If you are a Securities America customer, or customer of another full-service brokerage firm, who suffered significant losses because of the unsuitable recommendation of non-traded REITs, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

According to the claim, the woman was sold non-traded REITs and other alternative investments by Jonathan Pyne, a broker for Berthel Fisher. The claim argues that her age and low risk tolerance made the investments unsuitable for her. The investments included:

• Inland American Real Estate Trust
• Wells REIT
• Cornerstone Core Properties REIT
• Gulf Coast Rig & Equipment
• REEF Oil & Gas Income and Development
• Leaf Equipment Leasing Income Fund III

Securities arbitration lawyers say that these investments are illiquid and, in many cases, may have been negligently misrepresented. In this woman’s case and possibly many others, the investments also allegedly represented a concentration level of her liquid net worth that was too large to be suitable.

Firms have an obligation to properly supervise their brokers and 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 given their age, investment objectives and risk tolerance.

Non-traded REITs are attractive to investors because they carry a relatively high dividend or interest. According to investment fraud lawyers, however, these investments are inherently risky and illiquid, which limits access of funds to investors and makes them unsuitable for many individuals with conservative risk tolerances and those who need easy access to funds, especially when over-concentrated. Leveraged and inverse ETFs are designed to meet daily objectives, and “reset” each day. As a result, the performance of these investments can diverge from the performance of the underlying benchmark or index very quickly, and the problem is exasperated in volatile markets, making these investments unsuitable for many investors as well.

If you were sold unsuitable alternative investments from a Berthel Fisher broker, including non-traded REITs, inverse and leveraged ETFs and/or Oil & Gas Partnerships, you may be able to recover your losses through a securities arbitration claim. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

According to the FINRA investigation’s findings, Berthel Fisher did not have adequate written procedures and supervisory systems in place from January 2008 to December 2012 for the following alternative investments:

• Non-traded REITs
• Oil and gas programs
• Managed futures
• Business development companies
• Equipment leasing programs

Allegedly, the firm did not accurately calculate alternative investment concentration levels in some cases and, as a result, did not correctly adhere to suitability standards in those instances. Furthermore, Berthel Fisher staff was not adequately trained on the suitability standards for individual states.

In addition, from April 2009 to April 2012, Berthel Fisher allegedly did not have a “reasonable basis” for certain leveraged and inverse ETF sales, according to FINRA’s findings. FINRA investigators also found that non-traditional ETFs were not adequately researched or reviewed, and that the sales force was not adequately trained before registered representatives were allowed to make customer recommendations. Stock fraud lawyers believe that many customers may have suffered significant losses as a result of the recommendation and sale of these products, which were unsuitable for many investors.

Under FINRA rules, 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 given their age, investment objectives and risk tolerance. Furthermore, securities fraud attorneys say that firms have an obligation to properly supervise brokers’ activities while they are registered with the firm.

If you suffered significant losses in non-traded REITs or inverse and leveraged ETFs sold by Berthel Fisher or Securities Management & Research Inc., you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

The alleged misconduct relates to the time period from 2009 to 2012, but Chackman was registered with LPL between 2001 and 2012. In 2012, his registration was terminated by the firm for violating the firm’s policies and procedures regarding alternative investment sales.

According to the letter of acceptance waiver and consent, Chackman “recommended and effected unsuitable transactions in the accounts of at least eight LPL customers, by overconcentrating his customers’ assets in [REITs] and other illiquid securities.” The letter, dated December 12, 2012, also states that by submitting falsified documents, Chackman “was able to increase his customers’ accounts’ concentration in REITs and other alternative investments beyond the allocation limits established by [LPL].”

Typically, non-traded REITs carry a high commission, often as high as 15 percent, which motivates some brokers to make unsuitable recommendations to their clients. Non-traded REITs are attractive to investors because they carry a relatively high distributions of cash representing income and/or return of capital. According to stock fraud lawyers, however, these investments are inherently risky and illiquid because there is a limited market for reselling shares. This illiquidity and volatility makes non-traded REIT shares unsuitable for many individuals with conservative risk tolerances and those who need easy access to funds, especially when their portfolios are over-concentrated in illiquid investments.

Reportedly, one of Chackman’s clients made seven $75,000 purchases of one non-traded REIT over a six month period. After a year, 25 percent of the client’s liquid net worth and 35 percent of her assets were invested in REITs and other alternative investments. Another client, who purchased the same REIT, made seven purchases over seven months totaling $135,000 and had over one-third of his liquid net worth invested in REITs and other alternative investments after about two years.

According to securities fraud attorneys, brokers 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 given their age, investment objectives and risk tolerance. If a broker or firm fails to make suitable recommendations, investors may be able to recover losses through FINRA arbitration.

If you suffered significant losses as a result of doing business with Gary Chackman or received an unsuitable recommendation of non-traded REITs 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 Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

According to the claim, Paul Larsen, a financial advisor, liquidated the claimants’ mutual funds, blue chip stocks and fixed income investments. Allegedly, he told his clients he was doing this to get away from the market risk of these investments. Furthermore, he represented the replacement investments as safe and claimed they would generate income and were opportunities he offered to his “best clients.” However, the products he invested his clients’ funds in were risky, unsuitable investments including:

• KBS REIT
• Atlas America Public Fund #14
• Colorado Water Capital Group LLC
• Ridgewood Energy Fund S
• Ridgewood Energy Fund Q
• Platte Water Group I LLC/Yokam
• Puritan Capital Group LLC
• Issacher Global Management LLC
• UKAG Group LLC

According to stock fraud lawyers, Larsen was eventually fired from the investment firm but, reportedly, his clients were not notified and he was listed as the clients’ broker on their account for just under two years after he was fired. Allegedly, the clients did not find out there were any problems with Larsen until after FINRA barred him from the securities industry permanently.

Typically, non-traded REITs carry a high commission, often as high as 8-10 percent, which motivates brokers to make unsuitable recommendations to their clients. Non-traded REITs such as the KBS REIT are attractive to investors because they carry a relatively high distributions of income on a quarterly or monthly basis. According to securities fraud attorneys, however, these investments are inherently risky and illiquid, and many of them have suffered significant declines in value, resulting in investor losses.

The claim is seeking compensatory damages of over $2 million for negligence, breach of fiduciary duty and misrepresentation. If you suffered significant losses as a result of the negligence, breach of fiduciary duty, misrepresentation, or the unsuitable recommendation of non-traded REITs or other risky, illiquid products, 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 Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

Allegedly, Surevest invested some of its clients in high-risk portfolios, allocating very little of these accounts into traditionally low-risk investments. These high-risk investments allegedly included equities, non-traded REITs and other private placement securities. Some Surevest clients have raised allegations asserting that the high-risk investment recommendations were unsuitable and implemented regardless of the age, risk tolerance and other considerations of the investors.

According to securities arbitration lawyers, 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 given their age, investment objectives, and risk tolerance. Non-traded REITs are inherently risky and illiquid, which limits access of funds to investors and makes them unsuitable for many individuals with conservative risk tolerances as well as those who need easy access to funds. Other private placements and equities also carry significant risks.

The clients alleging unsuitability are also alleging that they would not have suffered such significant losses if their accounts had been managed and invested properly. Investment fraud lawyers say that investments with traditionally lower risk, such as bonds, may have been more appropriate for many investors. Surevest Capital Management, an investment advisory company, is registered in California, New York, Nevada and Arizona, and keeps offices in Las Vegas and Phoenix.

If you suffered significant losses because of the unsuitable recommendation of equities, non-traded REITs or other private placements from Surevest Capital Management or another full-service brokerage firm, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

The five firms that settled with Massachusetts are Ameriprise Financial Services Inc., Commonwealth Financial Network, Royal Alliance Associates Inc., Securities America Inc., and Lincoln Financial Advisors Corp.

“Our investigation into the sales of REITs, triggered by investor complaints, showed a pattern of impropriety on the sales of these popular but risky investments on the part of independent brokerage firms where supervision has historically been difficult to monitor,” Mr. Galvin said in a statement.

Reportedly, many seniors are being persuaded to invest in non-traded REITs but are not being made aware of the risks and illiquidity of these products. According to securities fraud attorneys, many brokers and advisers with full-service brokerage firms may be tempting senior investors with promises of better returns while failing to adequately disclose the risks. Many retirees have a low risk tolerance and want conservative, income-producing portfolios and are attracted by brokers’ promises of a steady stream of distribution income from non-traded REITs. What brokers and advisors often times do not disclose is that distributions may be suspended or stopped completely. Another problem retirees face with REITs is that they may need access to their funds, but many non-traded REITs have suspended redemptions, leaving investors with limited options in the event that they need to sell REIT shares to access their funds.]

“The enforcement section’s investigation revealed significant and widespread problems with the firms’ compliance with their own policies, practices and procedures rules and adherence with Massachusetts prospectus requirements leaving investors often trapped in illiquid and underperforming financial products,” according to a statement by the Massachusetts Securities Division.

If you or a loved one suffered significant losses as a result of the unsuitable recommendation by any advisor to invest in non-traded REIT, 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 Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a no-cost, confidential consultation.

Suitability claims arise when stockbrokers or investment advisors recommend investments that are not appropriate for an investor’s financial circumstances, risk tolerance, or investment goals. FINRA Conduct Rule 2310 requires that Members and their Representatives have a reasonable basis to recommend a transaction or investment strategy suitable for the customer, based on information obtained through reasonable diligence and the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, time horizon, liquidity needs, and risk tolerance.

Cases filed by the Gray Firm allege that in certain circumstances, LPL lacked a reasonable basis to recommend certain non-traded REITs, including Inland Western REIT (now known as Retail Properties of America. As a private unlisted investment, Inland Western was a Non-Conventional Investment (“NCI”). FINRA’s Notice to Members 03 71 states that “since NCIs often have complex terms and features that are not easily understood,” there exists the potential for customer harm or confusion since investors do not understand the risks involved. Members must conduct appropriate due diligence/reasonable basis suitability before offering these investments to the public. Specifically the Notice states that when offering NCI investments, FINRA Members are required to:

(1) conduct appropriate due diligence to understand the features of these products; (2) perform a reasonable basis suitability analysis; (3) perform customer specific suitability analysis for recommended transactions; (4) provide balanced disclosure of both the risks and rewards associated with the particular product ; (5) implement appropriate internal controls; and (6) train registered representatives regarding the features, risks and suitability of these products.

According to a recent New York Times article, state securities regulators have increased scrutiny on LPL’s sales practices. “LPL is on our radar screen more than any other firm,” said Lynne Egan, who oversees securities regulation in Montana. According to the New York Times article, as LPL has expanded to become the fourth largest brokerage firm in the country, state and federal authorities have censured the company and its brokers with unusual frequency, including for selling complex investments to unsophisticated investors, for speculative trading in customer accounts, and, in a few cases, for outright stealing from clients.

In the last year and a half, state regulators in Illinois, Massachusetts, Montana, Oregon and Pennsylvania have penalized LPL for failing to oversee its brokers properly. Brokers at the company have faced the most common industry reprimand more frequently than brokers at its large competitors since the beginning of 2012, according to a New York Times review of data from FINRA, the industry’s self-regulator.

Both Montana and Massachusetts have pursued LPL for allegedly selling complicated real estate investment trusts, or non-traded REITs, to unsophisticated investors. William F. Galvin, the Massachusetts secretary of the commonwealth, came to a $2.5 million settlement with LPL in February 2013 arising out of LPL’s sales of non-traded REITs to investors in his state. The Massachusetts complaint arose out of $28 million in non-traded REIT sales between 2006 and 2009, which were sold to nearly 600 clients in Massachusetts. According to the Massachusetts Securities Division, 569 of those transactions involved regulatory violations, including violations of prospectus requirements, violations of Massachusetts concentration limits and violations of LPL’s compliance practices. Inland American Real Estate Trust Inc. accounted for the largest amount of sales of all the REITs listed in the complaint. Other REITs discussed in the Massachusetts complaint included Cole Credit Property Trust II, Inc., Cole Credit Property Trust III, Inc., Cole Credit Property 1031 Exchange, Wells Real Estate Investment Trust II, Inc., W.P. Carey Corporate Property Associates 17, and Dividend Capital Total Realty.

According to the Massachusetts complaint, the investigation has “revealed significant and widespread problems with LPL’s adherence with the product prospectus and (state) requirements.” The complaint went on to state that “on paper, LPL set forth stringent requirements for the sale of non-traded REITs. In practice, LPL failed to review properly sales of non-traded REITs. While purporting to conduct a thorough review of offering documents, LPL allegedly overlooked prospectus delivery requirements in numerous sales of non-traded REITs.”

Attorneys at Law Office of Christopher J. Gray, P.C. are available to review possible cases involving unsuitable sales of non-traded REITs. Investors who believe that a financial advisor or stockbroker may have violated their rights in connection with sales of non-traded REITs or other securities may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a confidential, no-obligation consultation.

Lucia, whose radio program is broadcast daily in most of the nation’s top markets, promotes his investment program at seminars held at upscale resorts throughout the country. Some of those seminars are reportedly co-hosted by financial columnist and actor Ben Stein, who has called Lucia “the best wealth manager I know.”

The SEC proceeding (Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940, and Section 9(b) of the Investment Company act of 1940 (Exchange Act Release No. 67781, Administrative Proceeding File No. 3-15006 (“Order”)) alleges that Raymond J. Lucia Companies, Inc. (“RJL”) and Lucia presented materially misleading information at a series of investment seminars RJL and Lucia hosted for potential clients.

In the Order, the SEC alleges that Lucia, a registered investment adviser representative, used the investment seminars to promote his proprietary wealth management strategy called “Buckets of Money.” Lucia allegedly claimed that his Buckets of Money strategy would allow investors to retire comfortably, and generate inflation-adjusted income for life that would exceed the returns available from other investment strategies. Lucia claimed to have empirically backtested the strategy over actual bear market periods. Lucia and RJL allegedly claimed that the superior returns of the Buckets of Money Strategy could be proven by “backtesting” the results of the strategy during past downturns in the stock market. However, the SEC charges that this purported “backtesting” was misleading because (among other reasons) it failed to utilize actual prevailing inflation rates in its calculations of the purported returns for the Buckets of Money strategy.

More specifically, the SEC charges that the purported “backtesting” was minimal and that Lucia did not maintain adequate records to show the results. Lucia and RJL allegedly admitted during the SEC’s investigation that the only testing they actually performed were some calculations that Lucia made in the late 1990s — copies of which no longer exist — and two two-page spreadsheets that failed to duplicate the advertised Buckets of Money investment strategy.

The SEC Order is only an accusation, not a finding of wrongdoing. According to the SEC, a hearing will be scheduled before an administrative law judge, at which hearing Mr. Lucia will be entitled to dispute the SEC’s charges. Mr. Lucia has not been convicted of any crime and there has not been any finding that Mr. Lucia violated laws or regulations

Lucia and RJL reportedly have recommended that many investors place a portion of their money in a “bucket” of non-traded REITs Many customers may not be aware that non-traded REITs are generally illiquid, often for periods of eight years or more. Early redemption of shares is often very limited, and any secondary market for sales of the shares is typically limited.
Investors also often may not have realized that they risked potential losses of half or more of their investments in non-traded REITs. Many non-traded REITs have lost as much as half of their value in recent years due to their use of borrowed funds to invest in real estate as well as dropping commercial real estate values in the United States.

Investors who believe they may have been sold unsuitable non-traded REITs or who believe they may have a claim against RJL Investments may contact Law Office of Christopher J. Gray, P.C. for a confidential, no obligation consultation.