SEC Investigating Inland American REIT

Thursday, May 10th, 2012

According to the Wall Street Journal, the Securities and Exchange Commission is investigating Inland American Real Estate Trust (Inland American REIT) for potential violations of federal securities laws.

According to the report, the SEC 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.

Inland American is the largest of the nontraded REITs currently available and the investigation casts a large shadow on the nontraded REIT market.

The White Law Group continues to investigate the liability that brokerage firms have for recommending nontraded REITs like Inland American REIT.

Brokerage firms have a fiduciary duty to perform adequate due diligence on any investment that they recommend and to ensure that the investments recommended are appropriate in light of the client’s age, investment experience, net worth, and investment objectives.

The problems we see involving nontraded REITs generally relates to the financial advisor’s failure to adequately disclose the risks and illiquidity of these investments (as well as the high commission he/she earned for selling the REIT).

One of the other main complaints we continually hear relates to the problems in the valuation of these investments.  Finra rules currently mandate that sponsors of nontraded REITs establish an estimated per-share valuation within 18 months after the REIT stops raising money from investors. The problem with this language is that fund raising often lasts for years which results in the per-share valuation potentially remaining unchanged for years.

The White Law Group’s investigation into the improper sales of non-traded REITs includes, but is not limited to, recommendations to invest in the following REITs: Behringer Harvard REIT I, Inland America Real Estate Trust, Inland Western Retail Real Estate Trust, Wells Real Estate Investment Trust II, Piedmont Office Realty Trust, Desert Capital REIT, Apple REIT, Crystal River REIT, and KBS REIT.

To determine whether you may be able to recover investment losses incurred as a result of your purchase of Inland American REIT, please contact The White Law Group at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.

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