Retired California Woman Files FINRA Arbitration Claim Against Willow Cove Investment Group Over DST Losses
The White Law Group has filed a FINRA arbitration claim on behalf of a retired California woman against Willow Cove Investment Group. According to the Statement of Claim, her broker recommended a concentrated group of unsuitable Delaware Statutory Trust (DST) investments. The claimant is seeking damages of $1,000,000 to $5,000,000. If you invested through Willow Cove Investment Group and suffered losses, you may be able to speak with our FINRA arbitration attorneys about your options.
What the Claim Alleges
According to the Statement of Claim, the broker recommended a heavily concentrated position in illiquid DST investments without adequately considering the claimant’s age, risk tolerance, liquidity needs, or overall portfolio concentration. The claimant alleges that Willow Cove Investment Group, as the FINRA member firm responsible for supervising the broker’s recommendations, failed to catch and stop a pattern of unsuitable sales to a retired client.
Investments Named in the Claim
The claim identifies the following DST investments as having been recommended to the claimant:
- CAI Manufacturing Essential Asset I DST
- CAI Manufacturing Essential Asset II DST
- Cove Texas Net Lease 67 DST
- Osprey Storage DST
- NexPoint Semi Conductor DST
- NAI Walgreens Tulsa OK DST
- Incommercial Motor Fuel DST
DST investments are illiquid, non-traded real estate offerings typically sold to investors completing 1031 exchanges. They carry significant risk, including limited transferability, dependence on a single property or small pool of properties, and no secondary market, making a concentrated allocation across several DSTs especially risky for a retiree.
Managing Partner Statement
“We believe there may be other investors who were sold these same DST offerings and don’t yet realize they have recovery options,” said Dax White, managing partner of The White Law Group. “A retiree’s portfolio should provide income and stability, not a concentrated stack of illiquid real estate investments she can’t easily exit.”
Can Willow Cove Investment Group Be Held Responsible?
Broker-dealers have a duty to supervise the recommendations made by their registered representatives. When a firm fails to catch unsuitable or overconcentrated DST recommendations, it can be held liable for the resulting losses, even if it did not directly make the recommendation itself.
Recovering Losses from DST Investments
Investors who were sold unsuitable DST investments may be able to recover losses through FINRA arbitration. The White Law Group is investigating potential claims on behalf of other investors who worked with this broker or firm and were recommended similar DST offerings.
Contact The White Law Group
The White Law Group is a national securities fraud and investor protection law firm with offices in Chicago and Seattle. If you invested through Willow Cove Investment Group and believe you were sold unsuitable DST investments, call us today at (888) 637-5510 for a free consultation, or contact us online.
Frequently Asked Questions
1. How do I file a claim to recover money I invested through Willow Cove Investment Group?
Most brokerage account agreements typically include a pre-dispute arbitration clause, which many investors don’t know exists until they need it. That means claims like this are generally filed and resolved through FINRA arbitration rather than in court, and arbitration can still result in a monetary recovery for investors.
2. What makes a DST investment recommendation “unsuitable”?
A recommendation is unsuitable when it doesn’t match an investor’s risk tolerance, liquidity needs, or investment goals. DST investments are illiquid and tied to a single property or small pool of properties, making a concentrated allocation across several of them generally inappropriate for a retiree who needs steady, accessible income.
3. Can Willow Cove Investment Group be held responsible even if it didn’t directly approve the investment?
Yes. Broker-dealers have a duty to supervise their registered representatives’ recommendations. If a firm’s supervisory system failed to catch a pattern of unsuitable sales, the firm may be liable for the resulting losses.
