First Capital Real Estate Trust Inc. Securities Fraud Investigation *UPDATED*

Concerned about investment losses in First Capital Real Estate Trust Inc.? 

Have you suffered losses investing in First Capital Real Estate Trust Inc.? If so, The White Law Group may be able to help you. It’s possible to recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment. 

First Capital Real Estate Trust Incorporated is a public non-traded REIT based in New York City and founded in 2012. The company reportedly has not filed its quarterly or year-end financials with the SEC since August 2015. 

Investment Fraud Allegations 

According to a press announcement on December 16, 2019, the Securities and Exchange Commission reportedly charged the head of First Capital Real Estate Trust Inc., Suneet Singal, and three entities, with two separate frauds- one reportedly relating to First Capital Real Estate Trust Inc. (First Capital REIT), and the other allegedly relating to a business development company (BDC). 

Singal allegedly claimed that he owned 12 hotels and purportedly contributed them to First Capital REIT in order to acquire a $15.2 million interest in the REIT’s operating partnership, according to the SEC’s complaint. 

Singal and First Capital REIT then allegedly made material misrepresentations and omissions concerning the hotels in several filings with the regulator. The complaint alleges that, consequently, First Capital REIT allegedly reported inflated net asset values and purported to issue common shares to investors at inflated prices. 

The SEC’s complaint alleges that, after acquiring an ownership interest in the unnamed BDC’s external investment adviser, Singal allegedly directed the BDC to make two $1.5 million loans to an entity that he controlled, and then allegedly kept nearly half of the loan proceeds to himself. The BDC reportedly lost all of its $3 million investment. 

As we told you in October 2016, the REIT announced plans to suspend monthly distributions “to protect cash reserves” at the end of 2016.  Around the same time, Investment News reported that First Capital Real Estate Trust Inc. was failing to pay its employees on time. 

On May 30, 2017, the REIT reported that multiple indirect subsidiaries had each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of California. 

The indirect subsidiaries, and the respective ownership interest of First Capital Real Estate Operating Partnership, are: Township Nine Owner, LLC (31.3%), Capitol Station Holding, LLC (100%), Capitol Station Member (100%), LLC and Capitol Station 65, LLC (100%). 

Apparently, First Capital’s chief financial officer Jeffrey Zomback has submitted his resignation, effective July 12, 2019. 

Non-Traded REITs are High-Risk Investments

Compared to traditional investments, such as stocks, bonds and mutual funds, non-traded REITS, are considerably more complex.  REITs involve a high degree of risk. Unfortunately, many investors are unaware of the risks and liquidity problems with REITs such as First Capital Real Estate Trust, Inc. 

The White Law Group has represented numerous investors in claims against the brokerage firm that recommended non-traded REITs to its investors. 

Broker dealers are required to perform adequate due diligence on any investment they recommend. They must ensure that all recommendations are suitable for the investor. Recommendations should be in line with the investor’s age, risk tolerance, net worth, and investment experience. 

If brokerage firms fail to adequately disclose risks or make unsuitable investment recommendations can be held liable for investment losses. 

If you have invested in First Capital Real Estate Trust Inc. and would like to speak to a securities attorney about the potential to recover your investment losses, please call The White Law Group at 1-888-637-5510 for a free consultation. 

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 White Law Group, visit www.whitesecuritieslaw.com. 

To learn more about the firm’s investigation, please see: 

First Capital REIT CEO to Pay $7 million for Alleged Fraud Charges 

First Capital Real Estate Trust Incorporated Suspends Distributions 

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