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Written by 12:19 pm Investment Loss Recovery

NexPoint Flamingo, DST: Securities Investigation

NexPoint Flamingo, DST: Securities Investigation, featured by top securities fraud attorneys, the White Law Group

NexPoint Flamingo, DST Investors may have Claims

The White Law Group is investigating potential securities claims involving broker dealers who may have improperly recommended NexPoint Flamingo, DST to investors.

According to SEC filings, NextPoint Flamingo, DST  based in Dallas, TX, filed a Form D to raise capital from investors. The total offering amount sold was purportedly $58,277,704 according to the Reg D Filing.

There are a multitude of reasons why Delaware Statutory Trusts, or DSTs, are a high-risk investment. Although DSTs may be suitable for some investors, they are not the best alternative for everyone due to their drawbacks. One example is that 1031 DSTs cannot raise additional capital after the initial investment, which means that investors may be responsible for unexpected expenses, such as repairs, or a decrease in occupancy or rental income. The investors also have limited authority 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. The issue of illiquidity is also a primary concern when it comes to investing in a DST. This makes it difficult to find a buyer if an investor wants to sell their interest prior to sale of the property.

For more information on the risks of 1031 DST investments please see:  1031 Delaware Statutory Trust (DST) Investments Overview

1031 Delaware State Trust Investment: Suitable For You?

A financial advisor should analyze the suitability of investments before recommending them to their clients. There are several factors that should be taken into account to ensure an investment would be suitable for their clients. Some of those details include, liquidity needs, time horizon, risk tolerance, age, and income. Once that is completed the brokerage firm must ensure that due diligence was completed at every level of each investment. Consider all aspects of the investment and diligently review your options prior to investing in a DST.

FINRA Claims to Recover Losses 

The White Law Group is investigating the liability that FINRA registered brokerage firms may have for improperly recommending high-risk investments to investors. Brokerage firms continue to push this type of investment despite the risks of investing in DSTs, because of the high commissions associated with their sale and creation. It is important to note that FINRA does provide an arbitration forum for investors to resolve disputes if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment. It is possible that they could be found liable for investment losses in a FINRA arbitration claim.

If you are concerned about your investment in NexPoint Flamingo, DST please contact the securities attorneys at 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 Seattle, Washington.

For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit https://whitesecuritieslaw.com/

Last modified: July 27, 2023