BR Jefferson Place, DST: Securities Investigation

Concerned about your investment in BR Jefferson Place, DST?

Are you concerned about your investment in BR Jefferson Place, DST? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.

What is BR Jefferson Place DST?

BR Jefferson Place DST, sponsored by Bluerock Value Exchange (BVEX), was fully subscribed by 1031 exchange investors in February 2019. The $26 million equity offering reportedly consisted of a Class A, 228-unit multifamily community located in the Washington D.C. suburb of Frederick, Maryland.

According to SEC filings, BR Jefferson Place, DST filed a Form D to raise capital from investors in 2014. The offering type was purportedly  “Beneficial Interests in a Delaware statutory trust.” According to the form D, the sales compensation recipients were purportedly Emerson Equity, CFD Investments, Courtlandt Securities Corp., and Lightpath Capital.

The Risks of Investing in 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.

DSTs are not appropriate for all investors, as they come with a few disadvantages, compared to owning a property outright. 1031 DSTs cannot raise new capital, leaving investors holding the bag if expensive repairs are needed. The investors also have no control over the property, or the ability to make decisions about the property. While the sponsor may welcome feedback from the investor, they don’t allow any actions to be taken by said investor.

Additionally, 1031 DSTs are illiquid, and it can often be difficult to find a buyer when the investor is ready to sell.

Investigating Potential Lawsuits

The White Law Group is investigating the liability that FINRA registered brokerage firms may have for improperly recommending high-risk DST investments to investors.

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.

Class Action vs. Individual FINRA Arbitration Lawsuit

When deciding between a class action lawsuit and an individual FINRA arbitration, investors may have the option to pursue claims directly against the sales agents and brokerage firms responsible for selling the investments. These claims are separate from a class action lawsuit.

You might wonder whether a large class action lawsuit is a better litigation strategy than an individual FINRA arbitration case. The answer depends on various factors, but generally, if the financial loss is significant (for example, over $100,000), an individual arbitration claim may be the preferable route. On the other hand, class actions are typically more suitable for situations where a large number of individuals have smaller claims that would be impractical to pursue individually.

Free Consultation with Securities Attorneys

If you are concerned about your investment in BR Jefferson Place, 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.