American Hospitality Properties REIT: Securities Investigation

American Hospitality Properties REIT: Investigating Potential Lawsuits

The White Law Group continues to investigate potential FINRA lawsuits involving broker dealers who may have improperly recommended American Hospitality Properties REIT to investors.

If you are concerned about your investment losses in American Hospitality Properties REIT, the securities attorneys at The White Law Group may be able to help you.

Phoenix American Hospitality, a Dallas-based opportunistic hotel fund manager, reportedly sponsored American Hospitality Properties REIT, a Regulation A offering, to invest in limited and upscale select-service hotels in the United States.

Regulation A Risks

Regulation A allows investors to buy securities in smaller companies in earlier stages of development. These early –stage companies are able to offer and sell unregistered securities to the public, but with more limited disclosure requirements than what is required for publicly reporting companies.

Although Regulation A may provide a unique opportunity for you to invest in a start-up company, it will also involve quite a bit of risk.

Investments in startups and early-stage companies are speculative and it is possible the businesses will fail.  A start-up often relies on the development of a new business, product or service that may not find a market, unlike an investment in a mature business where there is a track record of revenue and income.

There is also the risk of illiquidity.  You may have to hold your investment for an indefinite period of time, even if there is no resale restriction.  Since the securities are not listed on an exchange, it may be difficult to find a buyer when you are ready to sell your investment.

Did Your Broker Unsuitably Recommend American Hospitality Properties REIT?

Under the SEC’s “Regulation Best Interest” standard, brokerage firms must conduct due diligence before recommending investments. If a financial advisor fails to assess risk suitability and investors suffer losses, they may have grounds for a complaint or lawsuit.

Lawsuit Options: FINRA Arbitration vs. Class Action

Investors considering legal action may wonder whether a class action lawsuit or an individual FINRA arbitration claim is the better option. Typically:

• FINRA Arbitration is often more suitable for investors with losses exceeding $100,000.
• Class Action Lawsuits are usually pursued when numerous investors have small claims that are impractical to litigate individually.

Prior to making recommendations to an individual investor, brokerage firms are required by the Financial Industry Regulatory Authority (FINRA) to disclose all the risks of an investment. Recommendations should only be made if the investment is suitable for an individual investor given their age, investment objections, investment experience and risk tolerance.

Brokerage firms that do not perform adequate due diligence on an investment and/or make unsuitable recommendations can be held accountable for investment losses through FINRA arbitration.

Securities Fraud Attorneys

If you are concerned about your investment in American Hospitality Properties REIT, please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.

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.