Lightstone Real Estate Income Trust Inc. Suspends Distributions

The White Law Group continues to investigate FINRA arbitration claims involving non-traded REITs such as Lightstone Real Estate Income Trust, Inc.

Unfortunately for investors it appears that many financial advisors/brokerage firms that sold non-traded REITs such as Lightstone Real Estate Income Trust, may have understated or misrepresented the risks and liquidity problems.

According to its website, Lightstone has offered investors “the opportunity to invest in a diversified portfolio of real estate through its various public non-traded REIT offerings.”

Unfortunately for investors, the Coronavirus (COVID-19) global pandemic has caused significant volatility in financial markets and uncertainty and risk in the commercial real estate markets. 

On March 25, 2020, the Lightstone’s Board of Directors determined to suspend regular monthly distributions for months ending after March 2020, according to filings with the SEC.

Real estate investment trusts (REITs) are complex and inherently risky products. Compared to traditional investments, such as stocks, bonds and mutual funds, REITs are significantly more complex and often better suited for sophisticated and institutional investors.

Another problem often associated with REIT recommendations is the high sales commissions brokers typically earn for selling  REITs – as high as 15%.  In addition to the high risks, non-traded REITs often lack liquidity. Investors looking to sell these investments often have difficulty finding a buyer, and if they are able to find one can suffer significant losses on the sale.

Filing a Complaint Against your Brokerage Firm

Prior to making recommendations to an individual investor, brokerage firms are required by the Financial Industry Regulatory Authority (FINRA) to disclose all the risks of an investment. Recommendations should only be made if the investment is suitable for an individual investor given their age, investment objections, investment experience and risk tolerance.

Brokerage firms that do not perform adequate due diligence on an investment and/or make unsuitable recommendations can be held accountable for investment losses through FINRA arbitration.

High commissions could be a motivating factor for unscrupulous financial advisors to sell non-traded REITs regardless of whether the investment is in line with the client’s investment objectives and profile.  Moreover, the total commissions and expenses make it difficult for the REIT to perform in line with the market.

Free Consultation with a Securities Attorney

If you are concerned about your investment in Lightstone Real Estate Income Trust Inc., you may be able to file a complaint against your brokerage firm. Please call the securities attorneys of 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 Franklin, Tennessee.

For more information on The White Law Group, visit http://whitesecuritieslaw.com.