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Written by 4:14 pm Blog, Securities Fraud Articles

Possible Securities Fraud Involving Non-traded REITs

The White Law Group is investigating potential securities fraud claims on behalf of investors involving non-traded REIT investments like Inland American and Inland Western.  Non-traded REITs are less regulated than other, more traditional investments and often pay a much higher commission that other products.  Additionally, non-traded REITs are generally illiquid, making them unsuitable for of the elderly and retired clients who purchased them at the recommendation of their financial advisor.

Another problem with non-traded REITs is the manner in which they are sold and the disclosures made about the investments to investors.  In the case of non-traded REITs like Behringer Harvard, Cornerstone, Inland Western and Inland American, investors have found themselves blindsided after discovering that their investments were high-risk, illiquid and contained highly specific and lengthy exit clauses.

FINRA is particularly focused on non-traded REITs right now, as it seems that many of the independent brokerage firms are selling these products to their clients.  One such firm that appears to be selling non-traded REITs to its clients is Linsco (n/k/a LPL Financial – one of the nation’s largest independent-contractor broker dealers).   These firms have a fiduciary duty to their clients to research the investments they recommend prior to offering them for sale and to insure that the investments are appropriate for the client. Given the issues involved in non-traded REITs (and the commissions that are paid to the broker and brokerage firm), in many cases it is impossible for a brokerage firm to demonstrate that they have fulfilled their obligation to the client as these investments are simply inappropriate for many investors.

If you have questions about a non-traded REIT investment you purchased, the securities attorneys of The White Law Group may be able to help.  For a free consultation, call the firm’s Chicago office at 312-238-9650.

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 Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.

For more information on The White Law Group, please visit our website at https://whitesecuritieslaw.com.

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