ShadowGlen DST: Investor Lawsuit Investigation
Investors in ShadowGlen DST may be facing risks tied to illiquidity, limited control, and potential cash-flow volatility. The White Law Group is investigating whether brokerage firms unsuitably recommended this 1031 exchange DST to retail investors without fully disclosing the risks. If you sustained losses or were overconcentrated in illiquid alternatives, you may have options to pursue recovery.
What Is ShadowGlen DST?
Sponsored by Versity/Crew Enterprises, ShadowGlen DST is a Delaware Statutory Trust structured as a private placement real estate investment. According to SEC filings, the issuer filed a Form D in 2021 seeking to raise approximately $26,893,742 from investors. ShadowGlen DST, a private placement Delaware Statutory Trust (DST) investment, is reportedly sponsored by Crew Enterprises (formerly Versity Investments, LLC, and previously Nelson Brothers). Crew is a real estate company that has specialized in student housing and multifamily property investments.
Why ShadowGlen DST Can Be Risky
- Illiquidity: DST interests are long-term and typically lack a secondary market.
- High Fees & Commissions: Upfront sales loads and sponsor fees can materially reduce returns.
- Loss of Principal: Poor property performance or adverse market conditions can lead to losses.
- Limited Investor Control: Key management and disposition decisions rest with the sponsor/trustee.
- Tax Sensitivity: Failure to meet IRS requirements may jeopardize intended 1031 tax deferral.
Broker Duties & Regulation Best Interest (Reg BI)
Broker-dealers must conduct reasonable due diligence and ensure recommendations are suitable given an investor’s objectives, risk tolerance, and liquidity needs. If your advisor failed to assess suitability, omitted material risk disclosures, or overconcentrated your account in illiquid DSTs, the firm may be liable for your losses.
Your Recovery Options: FINRA Arbitration vs. Class Action
For larger losses (e.g., $100,000+), individual FINRA arbitration is often more effective than a class action, which typically aggregates many smaller claims. Arbitration allows your specific facts—suitability, misrepresentation, and failure to supervise—to be presented against the selling brokerage firm.
The White Law Group has represented numerous investors in claims against brokerage firms involving 1031 DST investments. Many of these claims allege that financial advisors failed to adequately disclose the risks and limited liquidity of these high-commission products, leading to substantial investment losses for retail investors.
Free Consultation with a Securities Attorney
If you are concerned about your investment in ShadowGlen DST, call The White Law Group at 888-637-5510 for a free consultation. We represent investors nationwide from offices in Chicago, Illinois and Seattle, Washington. Visit our homepage to learn more about our representation of investors.
FAQs: ShadowGlen DST
Can I sell my ShadowGlen DST interest before the property is sold?
Generally, no. DST interests are highly illiquid and usually cannot be sold on a public market. Most investors must wait for the asset’s disposition.
What red flags suggest my ShadowGlen DST was unsuitable?
Common indicators include inadequate risk disclosure, concentration of a large portion of your portfolio in illiquid alternatives, reliance on income that later declined, and a recommendation that didn’t match your time horizon or liquidity needs.
How do I know if I have a claim—and what evidence helps?
You may have a claim if your broker misrepresented risks, failed to perform due diligence, or recommended ShadowGlen DST without assessing suitability. Helpful documents include new account forms, risk-tolerance questionnaires, emails/notes from your advisor, offering documents, account statements, and distribution histories.
