Four Springs Capital Lawsuit Investigation Update
The securities attorneys at The White Law Group are investigating potential FINRA arbitration claims on behalf of investors who may have suffered losses in DST investments sponsored by Four Springs Capital Trust.
Background on Four Springs Capital Trust and its DST Offerings
Four Springs Capital Trust is a real estate investment trust (REIT) that focuses on acquiring and managing a diversified portfolio of single-tenant, net-leased properties across retail, industrial, medical, and office sectors.
Its wholly owned subsidiary, Four Springs Capital, sponsors Delaware Statutory Trust (DST) investments as part of Section 1031 tax-deferred exchanges.
According to SEC filings and our Four Springs Capital lawsuit investigation update, this company has reportedly offered many DST programs, including:
Four Springs TEN31 Xchange
- FSC Healthcare 7 DST
- FSC Industrial III DST
- FSC Automotive I DST
- FSC Healthcare II DST
- FSC Industrial 7 DST
- FSC Industrial 6 DST
- FSC Industrial 8 DST
- FSC Industrial 9 DST
- FSC Healthcare II DST
- FSC Healthcare III DST
- FSC Industrial IV DST
- FSC Diversified 2 DST
- FSC HEALTHCARE IV DST
- FSC AS Jonesboro, AR, DST
- FSC AS Mt. Juliet, TN, DST
- FSC MRC Odessa, TX, DST
- FSC GM Lebanon, IN, DST
- FSC AS Jonesboro, AR, DST
- FSC BJ Tilton, NH, DST
In addition to Four Springs Capital 1031 DST investments, these investments are typically sold to retail investors seeking income and tax deferral benefits without the responsibilities of direct property ownership.
Four Springs Capital Trust’s Failed IPO Attempts
Four Springs Capital Trust attempted to go public on two separate occasions, filing for an initial public offering (IPO) in March 2017 and again in December 2022, according to SEC filings. Both IPO efforts were later withdrawn, citing “unfavorable market conditions.”
The Risks of Four Springs Capital 1031 Exchange DSTs
Delaware Statutory Trusts are complex and carry numerous risks, including:
- Illiquidity – These investments are not traded on any public market, and resale is often impossible.
- Market Risk – The underlying properties may decline in value due to economic or regional downturns.
- Distribution Cuts – Distributions are not guaranteed and may be reduced or suspended if tenants default or the property incurs unexpected costs.
- High Fees – Commissions and upfront fees (often as high as 10%) can significantly reduce potential returns.
- Foreclosure Risk – If the property has financing, there is a risk of default and foreclosure.
- Tax Risks – Changes in IRS rules or in the structure of DST offerings could affect 1031 exchange eligibility.
In some cases, broader company developments, such as prior failed IPO attempts, may be referenced in offering materials or disclosures. These details do not necessarily indicate wrongdoing but can provide additional context when evaluating how an investment was positioned to investors.
Unsuitable Investment Recommendations
Despite these risks, some brokerage firms may have unsuitably recommended Four Springs DSTs to investors without properly disclosing the downsides.
According to updates from the Four Springs Capital lawsuit investigation, these recommendations were made to conservative or elderly investors seeking income and capital preservation.
Because these investments typically pay high upfront commissions, brokerage firms may have been motivated more by compensation than by investor suitability. This could be grounds for a FINRA arbitration claim.
Investment Losses? Contact us now for a free consultation!
Class Action Lawsuit vs. FINRA Arbitration
If you have suffered losses in a Four Springs Capital 1031 Exchange DST investment, you may wonder whether to pursue a class action lawsuit or individual FINRA arbitration.
| Option | Class Action | FINRA Arbitration |
| Scope | Group claim against the issuer | Individual claim against broker/broker-dealer |
| Control | Limited – controlled by lead plaintiffs and attorneys | Full control over your own claim |
| Speed | Typically takes years to resolve | Typically resolved in 12–18 months |
| Damages | May result in small recoveries per investor | Often higher individual recovery potential |
| Eligibility | Often only against the issuer/sponsor | Can pursue broker or brokerage firm negligence |
FINRA arbitration is usually the better route regarding Four Springs Capital 1031 Exchange DST investment if your broker misrepresented the investment or failed to conduct due diligence.
Liquidity Limitations and Exit Challenges
One aspect of these investments that is often overlooked is the exit process.
Unlike publicly traded securities, DST offerings typically have no active secondary market. Investors are generally required to hold their positions until the underlying property is sold.
That timeline is not always predictable.
In many cases, investors may need access to funds sooner than expected but have limited or no ability to liquidate their position.
For individuals invested in Four Springs Capital 1031-exchange DSTs, this lack of flexibility can be a significant concern, particularly when financial circumstances change.
Liquidity is not just a feature.
It’s a planning factor.
When it is not clearly addressed at the time of recommendation, misunderstandings can occur.
Evaluating Investment Communications and Expectations
Investment decisions are often based on how opportunities are presented.
That includes conversations with financial advisors, written materials, and projected outcomes.
In some cases, investors may rely on summaries rather than full offering documents. Important details, such as holding periods, income variability, or risk exposure, may not always be emphasized equally.
Over time, that can lead to a gap between expectations and actual performance.
For investors in Four Springs Capital 1031 exchange DSTs, reviewing how the investment was described at the time of recommendation can be an important step.
Corporate Structure and Prior Market Activity
Another consideration involves the sponsor’s broader structure and history.
According to public filings referenced in a Four Springs Capital lawsuit investigation update, the company has made multiple attempts to access public markets.
These failed IPO attempts may raise questions for some investors about long-term strategy and capital structure.
A Four Springs Capital lawsuit investigation update may include reviewing how these events were disclosed to investors and whether they were presented in a way that aligned with the investor’s understanding of the investment.
Context matters. Not every investor receives the same level of detail.
For those evaluating losses tied to Four Springs Capital 1031 exchange DSTs, understanding the full picture (including prior corporate activity) can help clarify whether expectations were properly set.
Each investment carries its own structure.
Each recommendation carries its own responsibility.
Free Consultation with a Securities Attorney
If you are concerned about your investment in a Four Springs Capital 1031 exchange DST, call The White Law Group at 888-637-5510 for a free consultation. Our attorneys have recovered millions of dollars for investors nationwide through FINRA arbitration.
The White Law Group is a national securities fraud and investor protection law firm with offices in Chicago, IL, and Seattle, WA.
Frequently Asked Questions
1. Is a DST investment guaranteed to generate income?
No. Income distributions can be reduced or suspended based on tenant issues, market conditions, or property performance.
2. Can I sell my DST investment?
DSTs are illiquid and not traded on public markets. There is generally no secondary market, making resale very difficult.
3. What are my options if I lost money in a Four Springs Capital 1031 Exchange DST?
You may be able to recover losses through a FINRA arbitration claim if your financial advisor made an unsuitable recommendation or failed to disclose the risks.
