The SEC recently announced that it is looking at activity of Inland American REIT to determine if the REIT committed violations related to management fees, the timing and amount of distributions paid to investors, and transactions with affiliates. It is unclear at this time what the investigation will mean for the value of Inland American REIT but obviously this is not good news.
FINRA has stepped up its regulation of the sale of REITs and, in particular, the ways in which broker/dealers marketed and sold the products to investors. In many cases, and notwithstanding the risk of REIT investments, broker-dealers marketed these investments as safe and secure.
REITs typically pay a high commission - often as much as 15% (which often explains the stockbroker's motivation in recommending the REIT investment to the investor). Due to the relatively high interest or dividend offered by non-traded REITs like Inland American REIT, retired investors are often attracted to these products. Unfortunately, in addition to be risky investments, non-traded REITs are also illiquid (limiting investors' ability to access their own money for unforeseen expenses). Another problem with non-traded REITs is that broker-dealers are not required to frequently update the current price of the investment. This often leads investors to believe that their REIT investment is doing well even though the widespread real estate market collapse would indicate otherwise.
Have you suffered investment losses in Inland American REIT? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Mr. Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. Our law firm is devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
FINRA has stepped up its regulation of the sale of REITs and, in particular, the ways in which broker/dealers marketed and sold the products to investors. In many cases, and notwithstanding the risk of REIT investments, broker-dealers marketed these investments as safe and secure.
REITs typically pay a high commission - often as much as 15% (which often explains the stockbroker's motivation in recommending the REIT investment to the investor). Due to the relatively high interest or dividend offered by non-traded REITs like Inland American REIT, retired investors are often attracted to these products. Unfortunately, in addition to be risky investments, non-traded REITs are also illiquid (limiting investors' ability to access their own money for unforeseen expenses). Another problem with non-traded REITs is that broker-dealers are not required to frequently update the current price of the investment. This often leads investors to believe that their REIT investment is doing well even though the widespread real estate market collapse would indicate otherwise.
Have you suffered investment losses in Inland American REIT? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Mr. Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. Our law firm is devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
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