The White Law Group continues to investigate claims on behalf of Wells REIT II investors. Wells REIT’s own prospectus highlights many of the risks of the investment (risks that were often not disclosed by the selling agents). For example, the prospectus makes the following disclosures:
- No public market currently exists for [Wells REIT II] shares of common stock and [Wells REIT II has] no current plans to list our shares on an exchange.
- The offering price [of Wells REIT II] was not established on an independent basis and bears no relationship to the net value of [Wells REIT II’s] assets. The offering price is likely to be higher than the amount you would receive per share if we were to liquidate at this time because of the up-front fees that [Wells REIT II pays] in connection with the issuance of our shares.
- [Wells REIT II] will pay substantial fees and expenses to [its] advisor, its affiliates and participating broker-dealers, which payments increase the risk that you will not earn a profit on your investment.
- [Wells REIT II’s] advisor and its affiliates will face conflicts of interest, including significant conflicts created by [its] advisor’s compensation arrangements with [Wells REIT II] and other Wells-sponsored programs and conflicts in allocating time among us and these other programs.
Unfortunately for investors, these red-flags are often glossed over by the financial advisors that sell this product because of the enormous commissions that these advisors make for selling Wells REIT II (often more than 7%).
Nonetheless, brokerage firms and financial advisors have certain duties to their clients. Included amongst these duties is a duty to perform adequate due diligence on any investment before recommending it and making sure that any recommendation is appropriate in light of the client’s age, investment experience, net worth and investment objectives.
In light of the news in November 2011 that Wells REIT II had dropped more than 25% from the par value of $10 to an estimated $7.47 per share (and the rumors that the share price could drop further), it is apparent that many brokerage firms and financial advisors failed to adequate perform due diligence on this particular offering and may have liability for the losses that have resulted.
If you are concerned about your investment in the Wells Real Estate Investment Trust II and would like to speak to a securities attorney about your ability to recover your investment losses through FINRA arbitration, please call The White Law Group’s Chicago office at 312-238-9650 for a free consultation.
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, please visit our website at http://www.whitesecuritieslaw.