REIT fraud lawyer

Broker Valentino Scott Has Alternative Investment Customer Complaints

May 18, 2023 | by Staff Attorney

Advisor Valentino Scott (Scott), currently employed by brokerage firm Centaurus Financial, Inc. (Centaurus) has been subject to at least 10 disclosures including eight customer complaints, one regulatory action, and one employment termination for cause. According to a BrokerCheck report some of the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products and have recovered in excess of $50 million in investor losses.

In July 2022 a customer complained that Scott violated the securities laws by alleging that Scott misrepresented an unsuitable investment. The claim is currently pending and no specific damages are provided.

In March 2022 a customer complained that Scott violated the securities laws by alleging that Scott from October 2013 to the present, Scott made poor recommendations, misrepresented and overconcentrated the customers accounts in unsuitable, illiquid and risky investments. The claim is currently pending and no specific damages are provided.

DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments. Continue Reading

Arkadios Advisor Mark Reffett Accused of Unsuitable Investment Practices

September 21, 2022 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Mark Alexander Reffett (Reffett), currently employed by Arkadios Capital, has been subject to at least one customer complaint his career. According to records kept by the Financial Industry Regulatory Authority (FINRA), Reffett’s customer complaint alleges that Reffett engaged in unsuitable investment strategy and alternative investments.

In May 2020, a customer complained that Reffett violated the securities laws by alleging that Reffett engaged in unsuitable investment strategy and alternative investments beginning in 2014 and continuing to 2016. The claim alleges $1,575,881 in damages and is currently pending.

Alternative investments include a class of products including DDPs such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.

Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat safe benchmarks, like U.S. treasury bonds. Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do. Because investors are not compensated with additional return in exchange for higher risk and illiquidity, these kinds of alternative investment products are rarely, if ever, appropriate for investors. Continue Reading

Broker Frederick Atiyeh Accused of Selling Unsuitable Alternative Investments

September 19, 2022 | by Staff Attorney

Advisor Frederick Atiyeh (Atiyeh), currently employed by brokerage firm Crown Capital Securities, L.P. (Crown Capital) has been subject to at least four disclosures and customer complaints. According to a BrokerCheck report the customer complaints concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products and have recovered in excess of $50 million in investor losses.

In August 2021 a customer complained that Atiyeh violated the securities laws by alleging that Atiyeh made misrepresentation of the risk factors in regards to the purchase of several alternative investments. The claim is currently pending and the investor seeks $50,000 in damages.

In February 2021 a customer complained that Atiyeh violated the securities laws by alleging that Atiyeh engaged in a lack of proper due diligence, lack of suitability and over concentration in regards to investments in alternative and variable annuity products. The claim is currently pending.

Center Street Advisor Roy Williams Has Investment Complaints

April 12, 2021 | by Staff Attorney

Advisor Roy Williams (Williams), currently employed by brokerage firm Center Street Securities, Inc. (Center Street Securities) but doing business as Williams Financial Group has been subject to at least seven customer complaints and one regulatory action during the course of his career. According to a BrokerCheck report the most recent customer complaints since 2017 concern alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In May 2020a customer complained that Williams violated the securities laws by alleging that Williams made unsuitable investments and failed to conduct due diligence on the investments made. The claim involves alternative investments, alleges $100,000 damages, and is currently pending.

DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.

Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat safe benchmarks, like U.S. treasury bonds. Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do. Because investors are not compensated with additional return in exchange for higher risk and illiquidity, these kinds of alternative investment products are rarely, if ever, appropriate for investors. Continue Reading

The Parking REIT Update – Investment Loss Recovery Options

August 4, 2020 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP continue to investigate and represent investors who lost money in The Parking REIT (formerly known as the MVP REIT II) a non-traded real estate investment trust (Non-Traded REIT). The Parking REIT claims to own parking lots and that an investment in the REIT provides benefits including, low operating and maintenance costs, potential for long-term capital appreciation, redevelopment opportunities, a fragmented Industry, and heavy demand.

Several years ago the board of The Parking REIT announced that it would be suspending the company’s distributions. The Board claimed that the move would preserve capital in order to maintain sufficient liquidity to continue to operate the business and maintain compliance with debt covenants.

In a letter dated April 13, 2020, The Parking REIT provided more bad news for investors. The company stated that “The company faces significant legal expenses related to pending lawsuits, an SEC investigation, and legal and consulting fees in connection with our exploration of potential strategic alternatives to provide liquidity to stockholders.” Further, in order for the directors and officiers to protect themselves from increasing threates of liability the REIT paid “directors & officers liability insurance premiums added approximately $2.0 million to our general and administrative expenses in 2019.” In addition, the REIT announced that “increasing expenses and general economic conditions are expected to prohibit The Parking REIT management and board of directors from considering a reinstatement of common stock and preferred stock distributions for the foreseeable future.”

Finally, the REIT claimed that no liquidity event may occur stating “there can be no assurance that the company will cause a liquidity event to occur in the near future or at all.”

Advisor Bryan Benson Has Customer Complaint Over Alternative Investments

June 29, 2020 | by Staff Attorney

Advisor Bryan Benson (Benson), formerly employed by Wells Fargo Clearing Services, LLC (Wells Fargo) has been subject to at least one customer complaint and one regulatory action during the course of his career. According to a BrokerCheck report the customer complaint concerns alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In April 2020 FINRA barred Benson after he consented to sanctions and findings that he refused to provide information and documents that were requested by FINRA in connection with an investigation into an investment-related customer complaint. It is unclear the nature of the FINRA complaint that led to Benson’s bar from the industry

In April 2017 a customer complained that Benson violated the securities laws by alleging that Benson engaged in sales practice violations related to unsuitable investments concerning DPPs and limited partnership interests. The claim settled for $415,000.

Carey Watermark Investors 2 Suffer Losses – Investment Attorneys

June 24, 2020 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating recommendations by brokerage firms for their clients to invest in Carey Watermark Investors 2 aka Watermark Lodging Trust – a non-traded real estate investment trust (non-traded REIT). Carey Watermark Investors 2 originally sold shares for $10.00. The fund claims to have an estimated net asset value per share of $11.41. However, secondary market trading sources cite a far smaller value at only $5.50 a share – implying that the trading markets anticipate that Carey Watermark Investors 2 has substantially dropped in value.

As a background, Watermark Lodging Trust claims to be a premier lodging REIT with a portfolio of high-quality lodging assets led by an internal management team with a distinctive record of stockholder value creation. WLT claims to have been formed to take advantage of current and future opportunities in the lodging industry and seeks to provide investors with attractive, risk-adjusted returns and long-term growth in value.

Thereafter, on April 13, 2020, Carey Watermark Investors 2 and Carey Watermark Investors 1 merged in an all-stock transaction to create Watermark Lodging Trust. In addition, since March 2020 the REIT has suspended distributions due to the reduced travel demand and related financial impact resulting from COVID-19.

In May 2020 the company filed a notice with the SEC stating that “approximately $277 million of indebtedness is scheduled to mature after the date of this Form 8-K through December 31, 2020. This indebtedness is nonrecourse mortgage indebtedness and the Company has extension options with respect to a portion of such indebtedness. If the Company’s lenders do not provide covenant relief or if the Company is unable to repay, refinance or extend any such indebtedness, the lenders may declare events of default and seek to foreclose on the underlying hotels. We may also seek to give properties back to the lenders. We have begun active efforts to raise capital through a variety of strategies, including, without limitation, sales of assets, potentially at discounted prices; incurrences of debt; joint venture arrangements; and/or issuances of equity securities in transactions which may be dilutive to our stockholders.”

Strategic Student & Senior Housing Trust Investors Suffer Losses – Investment Attorneys

June 8, 2020 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating recommendations by brokerage firms for their clients to invest in Strategic Student & Senior Housing Trust (SSSHT) – a non-traded real estate investment trust (non-traded REIT). Strategic Student & Senior Housing Trust has stopped distributing a dividend leaving investors with no returns for the time being. As is too common in the brokerage industry, firms fail to understand the flawed non-traded REIT business model and only recommend these products for their 7% commissions – not because they benefit investors.

Strategic Student & Senior Housing Trust has been particularly hard hit in the recent recession due to the nature of its investments properties. Strategic Student and Senior Housing Trust is a public, non-traded REIT focused exclusively on assets in the student housing and senior housing areas. The fund is premised on investing in two areas “with strong demographic drivers from college students and baby boomers” according to its website.

The fund states that SSSHT intends to take advantage of the growing demand for recession-resistant asset classes and desirable demographic trends. The REIT states that it believes that SSSHT can provide stability, diversification, income, and potential growth over the long-term.

However, in an April 2020 prospectus update, Strategic Student & Senior Housing Trust stated that it incurred a net loss of approximately $19.6 million for the fiscal year ended December 31, 2019. Further, the REITs accumulated losses are approximately $41.8 million as of December 31, 2019. Moreover, due to the current recession the REIT suspended its primary offering while still early in its acquisition stage. Strategic Student & Senior Housing Trust warned that its operations may not be profitable in 2020.

Further Strategic Student & Senior Housing Trust investors are now trapped in the REIT when in March 2020, when the REIT’s board of directors determined to suspend the share redemption program with respect to common stockholders effective as of May 3, 2020. The REIT stated that until it can establish a net asset value per share it was not currently possible to determine accurately redeem or sell shares.

Scot Fairchild Has Complaints Over Alternative Investment Sales Practices

May 18, 2020 | by Staff Attorney

Advisor Scot Fairchild (Fairchild), currently employed by Lucia Securities, LLC (Lucia Securities) has been subject to at least two customer complaints during the course of his career. According to a BrokerCheck report one of the customer complaint concerns alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In December 2019 a customer complained that Fairchild violated the securities laws by alleging that Fairchild engaged in sales practice violations related to breach of fiduciary duty, misrepresentations and omissions, negligence and unsuitable investments in high risk, illiquid investments purchased between 2013 and 2014 and in violation of Nevada Securities Laws. The claim alleges $214,335 and is currently pending.

In January 2019 a customer complained that Fairchild violated the securities laws by alleging that Fairchild engaged in sales practice violations related to breach of fiduciary duty, negligence, breach of contract, and unsuitable investment recommendations related to Real Estate Investment Trusts purchased between on or around 2013 and 2014. The claim alleges $500,000 and settled for $175,000.

DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure. Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.

Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat safe benchmarks, like U.S. treasury bonds. Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do. Because investors are not compensated with additional return in exchange for higher risk and illiquidity, these kinds of alternative investment products are rarely, if ever, appropriate for investors. Continue Reading

Advisor Kenneth Guerra Has Complaints Over Alternative Investment Sales

February 3, 2020 | by Staff Attorney

Advisor Kenneth Guerra (Guerra), currently employed by Independent Financial Group, LLC (Independent Financial) has been subject to at least two customer complaints, one financial disclosure, and one regulatory violation during the course of his career. According to a BrokerCheck report the customer complaints concern alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs. The attorneys at Gana Weinstein LLP have represented dozens of investors who suffered losses caused by these types of high risk, low reward products.

In September 2019 a customer complained that Guerra violated the securities laws by alleging that Guerra engaged in sales practice violations related investments in high-risk alternative investments, resulting in a loss of some of their retirement assets. The claim alleges $100,000 in damages and settled for $25,000.

In March 2013 a customer complained that Guerra violated the securities laws by alleging that Guerra engaged in sales practice violations related to non-traded REITs purchased in 2007 through 2008 that were misrepresented and unsuitable. The claim alleges $80,000 in damages and settled for $60,000.