Securities Investigation- Carter Multifamily Growth & Income Fund II
Are you concerned about your investment in Carter Multifamily Growth & Income Fund II? 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.
Carter Multifamily Growth & Income Fund II announced in a letter to investors that the fund is suspending distributions to investors and that its advisor has agreed to defer 100% of its asset management fee beginning in October 2023. The company also reports that the advisor will subordinate the repayment of the deferred fees to the investor’s return of capital. The company reportedly explained that there has been a significant increase in interest rates and insurance.
Carter Multifamily Growth & Income Fund II, a private placement investment sponsored by Carter Funds, has raised approximately $193 million in equity since 2020. The fund reportedly acquired a diversified portfolio of eleven multifamily assets aggregating $582 million of acquisition price financed with $412 million of mortgage and other debt.
The Trouble with Private Placement Investments
Private placement investments such as these are typically sold by brokerage firms in exchange for a large up-front commission. High fees can range from 7-10%, as well as additional “due diligence fees” that can range from 1-3%. In this case, the sales commissions were estimated at 9%, according to the Form D.
The problem with private placement investments such as Carter Multifamily Growth & Income Fund is that they typically involve a high degree of risk. They are also often sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds.
Recovery of Investment Losses
The White Law Group is investigating the liability that FINRA registered brokerage firms may have for unsuitably recommending high-risk private placements to investors.
Despite the risks of investing in private placement investments, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.
Brokers have a fiduciary duty to put their client’s needs ahead of their own. If a stockbroker recommends an investment that is unsuitable for the client or fails to perform adequate due diligence on an investment, the advisor and his/her firm can be held liable for the resulting losses.
If you have concerns regarding your investment in Carter Multifamily Growth & Income Fund II and would like to speak with a securities attorney about your options, please call The White Law Group at 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.
With over 30 years of securities law experience, The White Law Group has the expertise to help investors defrauded in securities and investment fraud attempt to recover their investment losses. For more information, please visit our website, www.whitesecuritieslaw.com.
