Securities Investigation: Livingston Street Capital LSC-SCH MULTI1 DST
Did your broker recommend investing in Livingston Street Capital LSC-SCH MULTI1 DST? The White Law Group is investigating whether brokerage firms may have improperly recommended this high-risk Delaware Statutory Trust to retail investors. While these investments are often marketed as a tax-deferral tool for 1031 exchange purposes, many individuals are not fully advised of the significant risks involved.
Livingston Street Capital, LLC reportedly sources, sponsors, and distributes real estate investment opportunities through the retail broker-dealer channel, according to its website.
The company reportedly filed a Form D to raise capital from investors in 2019 for the offering Livingston Street Capital LSC-SCH MULTI1 DST. The entity type was a Business Trust and the total offering amount was purportedly $13,725,000.
LSC-SCH MULTI1 DST: Disadvantages of DSTs
Delaware Statutory Trusts, or DSTs, are an alternative for 1031 exchange investors seeking replacement properties, allegedly offering the potential for monthly income and diversification without any on-going landlord duties.
While there is a time and place for most investments, DSTs are not appropriate for many investors as they come with a few disadvantages. For example, 1031 DSTs cannot raise new capital once the investment is made, leaving investors holding the bag if expensive repairs are needed or other issues arise – like a drop in occupancy or rental income. Investors also have limited control over the property. While the sponsor may welcome feedback, DSTs don’t allow any one investor to take independent action.
Additionally, 1031 DSTs are illiquid, and it can often be difficult to find a buyer if an investor wants to sell their interest before the property is sold.
Investigating Potential Lawsuits
The White Law Group is investigating the liability that FINRA-registered brokerage firms may have for improperly recommending high-risk investments to investors. Specifically, the firm is investigating the following Livingston Street Capital DSTs, among others:
- LSC-Hanover Place 55 Plus Multi3, DST
- LSC-SCH MULTI1, DST
- LSC-UKHS HC2, DST
- LSC-3 Office, DST
- LSC-FAUR MC3, DST
Broker Due Diligence
Despite the risks of investing in DSTs, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.
Fortunately, FINRA does provide for an arbitration forum for investors to resolve disputes if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment. It is possible that they could be found liable for investment losses in a FINRA arbitration claim.
If you are concerned about your investment in Livingston Street Capital LSC-SCH MULTI1 DST, please call the securities attorneys at The White Law Group at 888-637-5510 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.
FAQs
What is Livingston Street Capital LSC-SCH MULTI1 DST?
It is a Delaware Statutory Trust sponsored by Livingston Street Capital, which filed a Form D in 2019 to raise approximately $13.7 million from investors.
Why might DSTs be unsuitable for certain investors?
DSTs are illiquid, can charge high fees, and leave investors with little to no control over management decisions. These factors may make them inappropriate for investors needing flexibility or liquidity.
What are the options if I suffered losses in LSC-SCH MULTI1 DST?
Investors may be able to pursue recovery through FINRA arbitration claims against the brokerage firms that recommended the DST, seeking damages for unsuitable advice or failure to disclose risks.
