Written by The White Law Group• June 2, 2024• 5:43 pm• Blog, Investment Loss Recovery

CAI Investments Daytona DST: Investor Alert

Investor Alert: CAI Investments Daytona DST, featured by top securities fraud attorneys, The White Law Group

CAI Investments Daytona DST: Securities Investigation

Are you concerned about your investment in CAI Investments Daytona 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.

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CAI Investments, based in Las Vegas, Nevada, is a vertically integrated real estate development company that reportedly finances, develops and manages commercial properties in key markets across the United States, according to Bloomberg.

According to SEC filings, the company filed a Form D to raise capital from investors in 2018 for the offering CAI Investments Daytona DST. The entity type was a Delaware Statutory Trust and the total offering amount was purportedly $6,440,235. The sales compensation recipient was reportedly Emerson Equity, a FINRA registered broker-dealer. According to the filing, the “managing broker-dealer will receive selling commissions of 6% of Offering Proceeds, dealer management fee of 1% of Offering Proceeds and an allowance of 1% of Offering Proceeds. Wholesaling fee of 1.0% of Offering Proceeds may be paid to wholesalers.”

DSTs may not be Suitable for you

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.

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.

Additionally, 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.

Regulation Best Interest and Broker Due Diligence

Under the “Regulation best interest” standard, broker-dealers are obligated to perform comprehensive due diligence when evaluating any investment. This evaluation aims to empower investors to make well-informed decisions aligned with their best interests.

If your financial advisor fails to perform due diligence on an investment before recommending it to you, they could be held liable for investment losses.

If your advisor unsuitably recommended a 1031 DST offering and you lost money, the securities attorneys at The White Law Group may be able to help you. You may be able to recover losses by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.

Class Action vs. Individual FINRA Arbitration Lawsuit

You many wonder whether a large class action lawsuit is a better litigation option for them than an individual FINRA arbitration case. The answer depends on many factors, but typically if the loss sustained is large (say larger than $100,000), an individual arbitration claim is likely a better option. Class actions as a recovery option are more appropriate for grouping large numbers of individuals who have small claims – too small to generally pursue individually.

Free Consultation with a Securities Attorney

FINRA provides an arbitration forum for investors to resolve disputes. The White Law Group represents investors in FINRA arbitration claims throughout the country. Visit the firm’s homepage to learn more about the firm’s representation of investors.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.