Investor Alert:  CF Valencia Life Sciences DST 

The White Law Group is investigating potential securities claims involving broker dealers who may have improperly recommended CF Valencia Life Sciences DST to investors.
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.  

CF Valencia Life Sciences DST – Suitable for you? 

According to SEC filings, CF Valencia Life Sciences DST, sponsored by Cantor Fitzgerald, filed a Form D to raise capital from investors in 2021. The total offering amount was purportedly $40,400,000 according to the Reg D filing. The sales commissions and fees were estimated at more than 9% of the total offering amount. 

While there is a time and place for most investments, DSTs are not appropriate for many investors as they come with a few disadvantages.  For example, 1031 DSTs cannot raise new capital once the investment is made leaving investors holding the bag if expensive repairs are needed or other issues arise – like a drop in occupancy or rental income. The investors also have limited control over the property.  While the sponsor may welcome feedback from the investors in the DST, they don’t allow any actions to be taken by any one investor. 

Further, 1031 DSTs are illiquid, and it can often be difficult to find a buyer if an investor wants to sell their interest before the property is sold. 

Investors may have Claims to Recover Investment Losses 

The White Law Group is investigating potential securities claims involving broker dealers who may have unsuitably invested clients in a 1031 DST investment. 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. 

Broker Due Diligence

Broker due diligence is a process undertaken by brokerage firms to ensure that they are recommending and selling investment products that are appropriate for their clients. The purpose of this process is to protect the interests of the brokerage firm and its clients by ensuring that the investments being offered are suitable for the client’s investment objectives, risk tolerance, and financial situation.   

Fortunately, FINRA does provide 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.  

If you are concerned about your?investment in CF Valencia Life Sciences 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.  

For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit https://www.whitesecuritieslaw.com.  

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