The White Law Group continues to file FINRA arbitrations on behalf of investors in Desert Capital REIT. These claims are against the financial professionals and brokerage firms that recommended Desert Capital REIT to their clients.
Brokerage firms and financial advisors have a fiduciary duty to perform due diligence on an investment prior to recommending it for sale to their clients. Based on what is now known about Desert Capital REIT, it appears clear that the broker-dealers that sold Desert Capital failed to perform the necessary due diligence.
At this point, this much is known:
(1) Desert Capital REIT suspended its dividend and redemption programs in or about 2008;
(2) Desert Capital REIT filed for Chapter 11 bankruptcy in the summer of 2011; and
(3) It has been reported that Desert Capital REIT has been subpoenaed by the Securities and Exchange Commission pertaining to fraudulent payments and transactions between Desert Capital and CM Capital (a related entity).For more information on The White Law Group's investigation into this matter, visit: http://www.whitesecuritieslaw.com/2012/02/08/recovery-of-desert-capital-real-estate-investment-trust-investment-losses/.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.