Cottonwood Office Park TIC – Securities Investigation

Investigating Claims – TN Cottonwood LLC – Cottonwood Office Park TIC 

According to its Form D SEC filing, Cottonwood Office Park TIC raised capital from investors through the offering TN Cottonwood, LLC. The total offering amount was purportedly $2,625,000. 

The White Law Group is investigating potential securities claims on behalf of investors involving Cottonwood Office Park, DST. If your broker-dealer recommended that you purchase a risky TIC investment, you may be able to recover your losses through FINRA Arbitration. 

A TIC investment is defined as a property that is sold to multiple investors who then own fractional interests in the property as co-owners.  The co-owners enjoy their share of the “pro rata” share of the net income or expenses, appreciation, and share of the proceeds at the sale of the property.  Tenants in common investors are not involved in the day-to-day management of the property but do retain certain other rights regarding the management of the property. 

Is a TIC investment suitable for you? 

It’s important to understand the potential risks, costs, and advantages of a TIC, such as Cottonwood Office Park TIC, before investing. Generally offered as a 1031 exchange tax deferral, financial professionals often misrepresent the risks and benefits of these investments. 

These investments are often marketed to conservative and retired investors. TIC investments also typically pay a high commission, sometimes more than 10%, which may explain why a financial advisor may recommend them to their clients. 

Your financial advisor should ensure that any investment that they recommend is suitable for their clients. Liquidity needs, time horizon, risk tolerance, age, income, are just a few categories an advisor should take into account prior to recommending any investment. The brokerage firm must ensure that due diligence was completed at every level of each investment. 

Suitability 

FINRA (Financial Industry Regulatory Authority) has rules in place to ensure that broker-dealers and their associated representatives act in the best interests of their customers when recommending investments. These rules are collectively known as the Suitability Rule, and they are designed to protect investors and promote fair and ethical practices in the securities industry. 

FINRA Rule 2111, known as the Suitability Rule, outlines the requirements that brokers and broker-dealers must follow when making investment recommendations to customers. Before recommending any investment product or strategy to a customer, the broker-dealer must conduct reasonable diligence to understand the investment’s features, risks, and potential benefits. This means having a reasonable basis for believing that the recommendation is suitable for at least some investors based on its characteristics. 

The broker-dealer must have a reasonable basis for believing that the recommended investment is suitable for the specific customer based on their financial situation, investment objectives, risk tolerance, and other relevant factors. The broker must gather essential information from the customer to make an appropriate recommendation. 

The broker-dealer must have a reasonable basis for believing that a series of recommended transactions, when taken together, are not excessive and do not result in churning or excessive trading. 

Hiring a FINRA Attorney 

If you are concerned about your investment in TN Cottonwood, LLC – Cottonwood Office Park TIC, The White Law Group may be able to help you through FINRA arbitration. For a free consultation with a securities attorney, please call 888-637-5510. 

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. 

For more information on the firm and its representation of investors in FINRA arbitration claims, visit http://whitesecuritieslaw.com.