On December 28, 2016, American Realty Capital – Retail Centers of America (ARC RCA) announced that it would be hosting a series of webinars related to the prospective merger between ARC RCA and American Finance Trust, Inc., which shareholders of the respective companies are entitled to vote on by February 13, 2017.

Additionally, ARC RCA’s board of directors recommended that shareholders reject a mini-tender offer received from Coastal Realty Business Trust, a subsidiary of Mackenzie Capital Management, LP.   Coastal’s mini-tender offer is to purchase up to 1 million shares of ARC RCA at a price per share of $5.50.  ARC RCA noted that its most recent estimated net asset value per share was $9.00 as of March 18, 2016, approximately 63% higher than Coastal’s offering price in the mini-tender offer.

The White Law Group continues to investigate potential securities fraud claims involving broker-dealers’ improper recommendation that investors purchase high-risk non-traded REIT investments, like American Realty Capital – Retail Centers of America . Many investors are not fully aware of the problems and risks associated with these investments before purchasing them.

Real estate investment trusts (REITs) are complex and inherently risky products. Compared to traditional investments, such as stocks, bonds and mutual funds, REITs are significantly more complex and often better suited for sophisticated and institutional investors.

Another problem often associated with REIT recommendations is the high sales commissions brokers typically earn for selling REITs – as high as 15%. Brokers have an obligation to make investment recommendations that are consistent with their clients risk tolerance, net worth, investment objectives and experience in the market. Unfortunately, in many cases, the high sales commission may provide some brokers with enough incentive to make unsuitable investment recommendations.

In addition to the high risks, non-traded REITs, like American Realty Capital – Retail Centers of America often lack liquidity. Investors looking to sell these investments often have difficulty finding a buyer, and if they are able to find one can suffer significant losses on the sale.

Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim. For more information on The White Law Group’s investigation see  American Realty Capital –Retail Centers of America Tender Offer

If you suffered losses investing in American Realty Capital – Retail Centers of America and would like a free consultation with a securities attorney, please call The White Law Group at (888) 637-5510.

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group, visit www.whitesecuritieslaw.com.