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Alternative Investment Losses, featured by top securities fraud attorneys, the White Law Group

Alternative Investment Lawyers | Recover Losses from Unsuitable Recommendations

Have you suffered investment losses after your broker recommended an alternative investment? You may have legal options.

The attorneys at The White Law Group represent investors nationwide in claims against brokerage firms involving unsuitable or improperly recommended alternative investments. These cases are typically handled through FINRA arbitration, where investors may be able to recover some or all of their losses.

We regularly handle claims involving non-traded REITs, private placements, structured notes, business development companies (BDCs), and other complex investment products.

What Is an Alternative Investment?

An alternative investment generally refers to any investment outside of traditional stocks, bonds, and mutual funds. These products are often more complex, often times illiquid, and subject to different regulatory oversight.

While alternative investments were historically limited to institutional or high-net-worth investors, they are now frequently sold to retail investors—sometimes inappropriately.

For a broader overview, see our page on Complex Investment Products.

Common Alternative Investments in Investor Claims

The White Law Group handles cases involving a wide range of alternative investments, including:

These investments are often marketed as income-producing or diversified solutions, but they can carry significant and sometimes undisclosed risks.

Why Alternative Investments Often Lead to Investor Losses

Alternative investments can present unique risks that may not be fully explained to investors, including:

  • High fees and commissions: Many alternative investments carry substantial upfront costs and ongoing management fees that can erode returns.
  • Illiquidity: Investors may be unable to sell or redeem their investment for years, if at all.
  • Complex structures: These products are often difficult to understand, even for experienced investors.
  • Lack of transparency: Limited disclosure can make it difficult to evaluate performance and risk.
  • Conflicts of interest: Brokers may receive higher commissions or incentives to recommend these products.

For more on liquidity-related risks, see our Illiquid Investments page.

Common Legal Claims Involving Alternative Investments

When brokers recommend alternative investments, they must follow strict regulatory and legal obligations. Many investor claims arise from:

  • Unsuitable recommendations based on the investor’s financial situation or risk tolerance
  • Failure to disclose risks, including illiquidity and potential loss of principal
  • Misrepresentations or omissions about the investment’s performance or safety
  • Overconcentration in alternative investments within a portfolio
  • Failure to perform due diligence before recommending the investment
  • Breach of fiduciary duty or negligence by the brokerage firm

Signs You May Have a Claim

You may have a potential claim if:

  • You were told the investment was “safe,” “low-risk,” or suitable for income
  • You did not fully understand the investment or how it worked
  • A large portion of your portfolio was placed in alternative investments
  • You are unable to access or sell your investment
  • The investment has significantly declined in value
  • The risks were not clearly explained before you invested

FINRA Rules and Broker Obligations

Broker-dealers and financial advisors are regulated by the Financial Industry Regulatory Authority (FINRA) and must comply with suitability and conduct rules when recommending investments.

Under FINRA Rule 2111 (Suitability), brokers must have a reasonable basis to believe that an investment is appropriate based on the investor’s:

  • Financial situation
  • Investment objectives
  • Risk tolerance
  • Time horizon

Alternative investments often require heightened scrutiny due to their complexity, risks, and fee structures.

Broker Due Diligence Failures

Before recommending any investment, brokerage firms are required to conduct reasonable due diligence to understand the product’s risks, structure, and likelihood of success.

Failures in due diligence may include:

  • Recommending products without fully understanding their risks
  • Ignoring red flags or adverse financial information
  • Failing to vet the issuer or underlying assets
  • Allowing unsuitable sales practices by brokers

When firms fail to meet these obligations, they may be held liable for investor losses.

Alternative Investment Cases We Handle

The White Law Group has experience representing investors in claims involving a variety of alternative investments. These are examples:

These cases often involve allegations of unsuitable recommendations, lack of due diligence, and misrepresentation.

How to Recover Investment Losses

Most investment loss claims against brokerage firms are handled through FINRA arbitration, a dispute resolution process designed specifically for investor claims.

Through FINRA arbitration, investors may be able to recover losses resulting from:

  • Unsuitable investment recommendations
  • Broker negligence
  • Misrepresentation or omission of material facts

The process is typically faster and more cost-effective than traditional litigation.

Contact an Alternative Investment Lawyer

If you have suffered losses in an alternative investment, you may be entitled to financial recovery.

The White Law Group is a national securities fraud and investment loss recovery law firm with offices in Chicago and Seattle. We represent investors in all 50 states and handle cases on a contingency fee basis.

Call 888-637-5510 for a free, confidential consultation.

FAQs

Can I recover losses from an alternative investment?

Yes, if your broker recommended an unsuitable investment or failed to disclose key risks, you may be able to recover losses through FINRA arbitration.

What makes an alternative investment unsuitable?

An investment may be unsuitable if it does not align with your financial situation, risk tolerance, or investment objectives—especially if it involves high risk, illiquidity, or complexity.

How long do I have to file a claim?

FINRA arbitration claims are generally subject to eligibility rules and time limits, so it is important to consult an attorney as soon as possible to preserve your rights.

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