The Wall Street Journal has reported that the Securities and Exchange Commission is investigating Inland American Real Estate Trust (Inland American REIT) to determine if the REIT committed securities law violations related to management fees, the timing and amount of distributions paid to investors, and transactions with affiliates. Now that the SEC is involved, many investors in the non-traded Inland Western REIT (now known as Retail Properties of America, Inc.) have inquired about their ability to recover their losses. There are a number of things investors must understand about the SEC, its investigations are incredibly slow and rarely do investors ever benefit from them. Investors need to take matters in their own hands. Many claims are now being filed by Inland Western REIT and other REIT investors for misrepresentation, unsuitable recommendations and/or overconcentrations of their investment funds in Inland Western REITs and other REIT investments to recover their REIT losses.
At first blush, one may think that the best claim is against the Inland Western REIT itself and its management but one needs to remember why they first invested. Undoubtedly, the Inland Western REIT and other REIT investments were recommended by your brokerage firm and financial advisor who have a fiduciary duty to not misrepresent or omit to state important facts, perform due diligence on any REIT and first make sure that the investment is suitable at all for any investor and then specifically ensure that the investment is appropriate in light of the investor's actual age, investment experience, investment objectives, tax and financial condition. If the brokerage firm and its advisor fail in fulfilling any one of these duties under common law and under the FINRA Code of Conduct, investors will have the right to recover their investment losses against them through a FINRA arbitration proceeding and/or court if no arbitration agreement has been executed.
The most common misrepresentation and misleading statement claims that the Inland Western REIT and other REIT investors have been making relate to the risk associated with the non-traded REITs. Many investors have complained that Inland Western REIT and other REITs were not adequately represented before purchase and that they did not know the real truth about the valuations, performance, prospects, liquidity, or distribution and redemption practices of management relating to their investment. Many elderly investors seeking income were overconcentrated in Inland Western REITs and other REITs because they needed income. Sadly they learned too late that there were no guarantees that distributions would be made. Some REIT investors have just learned that they would no longer be receiving distributions or that the distributions they actually received were derived from loans and not the true cash flow of the REIT. Brokerage firms and their financial advisors were eager to push REIT investments on their clients for the high commissions compared to other products. Unfortunately, many investors are locked in and unable to sell their REIT investments without suffering without selling into deeply discounted secondary market for some other REIT investments. If you are an Inland Western REIT investor with the same complaints, we believe we can help you recover your REIT losses!
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, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are 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 email@example.com for answers to any of your questions about this blog post and/or any related matter.