AFIN- American Finance Trust – Recovery of Investment Losses through FINRA Arbitration
Have you suffered investment losses in AR Global’s American Finance Trust (AFIN)? If so, the securities attorneys at The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.
American Finance Trust (AFIN) is a public, non-listed real estate investment trust formerly known American Realty Capital Trust V. As of December 31, 2017 AFIN real estate assets, at cost, comprised $3.5 billion.
On July 9, 2018, American Finance Trust (AFIN) announced that it had conducted a 2-1 reverse stock split and changed its common stock to Class A common stock as part of its “phased liquidity plan,” which is intended to reduce prospective selling pressure immediately following the listing of AFIN’s Class A common stock on the NASDAQ.
AFIN, which started trading on the Nasdaq on July 19, 2018 opened at $13.15 per share and closed at $15 per share. On Oct. 14, 2018 the REIT’s stock price closed at $14 per share, 40 percent lower than its net asset value of $23.56 per share. The original offering price was $25.00 per share.
Unfortunately for investors, shares of American Finance Trust Class A shares (AFIN) closed yesterday at $8.49 per share.
American Finance Trust shareholders filed a class action lawsuit at the end of 2018, and are reportedly suing over an IPO that allegedly wiped $1 billion off the company’s market value. The plaintiffs reportedly gained shares in American Finance Trust after it merged with another AR Global REIT, American Realty Capital – Retail Centers of America. According to the lawsuit, the company did not outline the possible negative impacts of the merger on the financial performance of the REIT in its registration statement.
The High Risks of Non-Traded REITs
A real estate investment trust (REIT) is a company that owns, and in most cases, operates income-producing real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers and hotels. Some REITs also engage in financing real estate. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks.
REITs are complex and high risk investments that are really only suitable for sophisticated investors. It is the duty of the brokerage firm to perform due diligence on any investment and to ensure that the investment is suitable for a particular investor in light of that investor’s age, investment objectives, income, net worth, and investment experience. Given the current risk of devaluation of these REITs, such investments are likely only suitable for wealthy and/or sophisticated investors.
AFIN Shareholders may have Recovery Options
Unfortunately, many investors were not made adequately aware of the risks and liquidity problems associated with non-traded REITs before purchasing them.
Broker dealers are required to perform adequate due diligence on any investment they recommend. They must ensure that all recommendations are suitable for the investor. Recommendations should be in line with the investor’s age, risk tolerance, net worth, and investment experience.
Broker dealers that fail to adequately disclose risks or make unsuitable investment recommendations can be held liable for investment losses through FINRA Arbitration.
If you suffered losses investing in American Finance Trust (AFIN), the securities attorneys at The White Law Group may be able to help you. To speak to a securities attorney about the potential to recover your investment losses, please call the offices of The White Law Group at 1-888-637-5510 for a free consultation.
These claims are distinct from the class action filed directly against American Finance Trust and could be pursued concurrently.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.
To learn more about the firm’s investigation, please see:
American Finance Trust Decreases Distributions
Third Party Offers to Tender Shares of American Finance Trust
American Finance Trust and ARC Retail Centers of America Merger…
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