Many investors have reported feeling mislead or deceived when investing in non-traded Real Estate Investment Trusts (REITs). While many REITs are marketed as low-risk, high yield investments, some investors have described losing significant amounts of their REIT investment, being unable to redeem their shares, or losing vital investment income from suspended distribution payments. Following these complaints, the Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission (SEC) have increased scrutiny into a number of brokerage and investment firms who market and manage non-traded REITs.

If you believe that you were given misleading or untrue information regarding a REIT, and have lost part of your investment as a result, you may be eligible for monetary recovery. Contact our securities lawyers today about pursing a potential FINRA arbitration claim or securities class action lawsuit.

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REIT Risks: Why Not to Invest In REITs

Some of the biggest complaints associated with REITs include issues with unsuitability, illiquidity, high upfront fees, and uncertain valuations.

  • Unsuitability
    Due largely to a lack of liquidity, many REITs, especially non-traded REITs, are rarely suitable for short-term investors according to FINRA. Short-term investors who were sold on these investment products may have been misled.
  • Illiquidity
    Non-traded and private REITs are typically not easy to sell because they are not publicly traded on a major exchange. This puts investors at significant risk of losing their money should the REIT lose value.
  • Up-Front Fees
    According to FINRA, the fees associated with non-traded REITs are typically much higher than those associated with traded REITs, causing investors to lose up to 15 percent of their principal before it is even invested. Brokers may commit non-traded REIT fraud by failing to disclose accurate information about up-front fees.
  • Uncertain Valuation
    Since shares of private and non-traded REITs are not sold on any exchange, the value of a share can be hard to determine. Often sold as an answer to volatility, one SEC attorney noted in the New York Times that the SEC objects to “the suggestion that they are eliminating volatility simply because they don’t tell you what the value is,” adding “It’s not that it’s not volatile. It’s just that you don’t know.” This means that some investors may not even know that they are taking losses in their investment.

A good stock broker or investment advisor should disclose all of the risks and fees associated with REITs before placing investors in these uncertain investments. If your broker or advisor failed to provide you with the proper information, you may have a REIT Fraud claim. Speak with an experienced securities attorney to learn more about your options.

Gibbs Law Group REIT Class Action Lawsuits & Investigations

Gibbs Law Group’s securities fraud lawyers have extensive experience when it comes to REIT investment lawsuits. We have filed a number of class action lawsuits, as well as individual investor claims, on behalf of those who were placed in risky and bad REIT investments.

Our securities team filed a securities class action lawsuit against David Lerner and Associates, alleging that the brokerage firm used misleading information in selling shares of Apple REITs to investors. The lawsuit also alleges that the firm failed to conduct adequate research to determine whether the REITs were suitable for investors. The lawsuit and ones like it came on the heels of complaints from investors and investigations into the trust by industry watchdog organizations like the SEC and FINRA.

In addition to the Apple REITs lawsuit, Gibbs Law Group has filed a number of individual claims, and is currently investigating similar allegations against Behringer Harvard REITs, as well as:

If you invested in any of these REITs, or others, we may be able to help. Speak with a lawyer today about recovering your money.

Individual Lawsuits: Broker and Advisor REIT Fraud

Our securities lawyers are currently filing individual claims on behalf of investors who were placed in unsuitable REITs by their stock brokers or investment advisors.

In addition to a number of other firms, we are investigating Cetera and East West Bank on allegations that Cetera advisors were misleading conservative investors and steering them into risky private placements and non-traded REITs, such as Hospitality Investors Trust, Northstar Healthcare, and Arc Realty Finance.

Financial advisor misconduct is not uncommon and can happen to almost anyone. If you believe your stock broker or financial advisor placed you in an unsuitable investment, you may be able to recover your losses. Contact our securities team to learn more.

Other REIT Class Actions

In addition to the Apple REITs lawsuit, there have been a number of lawsuits alleging securities fraud by non-traded REITs. Examples of these lawsuits, some of which have already settled, include:

W.P. Carey REITs Lawsuit
This lawsuit was filed by the SEC alleging that W.P. Carey & Co. which, managed the W.P. Carey REITs, violated securities laws when it paid an undisclosed $10 million to a broker-dealer of the REITs. The case has settled.

Inland Western REITs Lawsuit
The Inland Western REITs lawsuit alleged that executives engaged in self-dealing by using shares of Inland Western REITs to purchase four advisory firms in which the executives supposedly had a financial interest. The case has settled.

Ameriprise Financial Services Lawsuit
The Ameriprise Financial Services Lawsuit alleged that the company received undisclosed payments to market REITs. As a result of this lawsuit, Ameriprise Financial settled with the SEC.

No Cost to File

Our team typically handles securities claims on a contingency or “success-fee” basis. This means that you will not have to pay an hourly rate or pay out-of-pocket in advance for legal representation. If you win, the lawyer’s fee will come out of the money awarded to you. But if no money is recovered from your claim, you will owe nothing to our team for attorney’s fees or the work done on the case.

We are happy to discuss any questions related to our fees as well as different arrangements we can structure.

Our Securities Lawyers Have a Winning Record Against the World's Largest Companies

Our securities lawyers have recovered over a billion dollars on behalf of our clients against behemoths, such as Chase Bank, Mastercard, and Anthem Blue Cross Blue Shield. Read more about our results.

You “shouldn’t presume that powerful banks and other powerful interests can just get away with doing bad things. Good, qualified counsel that are committed to a cause can usually figure out how to prosecute such cases effectively and prevail.”

Eric Gibbs, award-winning securities attorney

Praise from the Courts

Federal judge in our AT&T class action:

“I’ve always found them to be extraordinary counsel in terms of their preparation and their professionalism.”

Federal judge in our Chase lawsuit (resulting in $100 million settlement):

They “fought tooth and nail, down to the wire” to achieve “the best settlement that they could under the circumstances.”

Read more about what judges say about us.

Michael Schrag

Michael has over 20 years of experience representing individual and small business plaintiffs against the world’s large financial institutions, including Visa, Mastercard, and Chase.

Eileen Epstein

Eileen is involved in the firm’s securities practice and has over a decade of experience in the legal world. She received her law degree from American University in 2005.

David Stein

David’s advocacy has generated major recoveries for consumers impacted by financial fraud. He was named to the Top 40 Under 40 by Daily Journal and a “Rising Star in Class Actions” by Law360.

Amanda Karl

Amanda is spearheading a securities lawsuit against NantHealth concerning fraudulent statements to investors about the success of its key product.

Our Financial Fraud Experience

Gibbs Law Group’s financial fraud and securities lawyers have more than two decades of experience prosecuting fraud. Our attorneys have successfully litigated against some of the largest companies in the United States, and we have recovered more than a billion dollars on our clients’ behalf.

We have fought some of the most complex cases brought under federal and state laws nationwide, and our attorneys have been recognized with numerous awards and honors for their accomplishments, including Top 100 Super Lawyers in Northern California, Top Plaintiff Lawyers in California, The Best Lawyers in America, and rated AV Preeminent (among the highest class of attorneys for professional ethics and legal skills).