According to reports, Inland American Real Estate Trust recently announced that some investors are alleging the REIT’s management failed in its fiduciary responsibility, resulting in false valuations and excess fees being paid to the REIT’s business manager.
In its annual report, the REIT stated that two separate groups of shareholders are raising similar claims as those announced in a Securities and Exchange Commission investigation. Last year, the REIT stated that the SEC had launched a fact-finding investigation to determine whether there had been violations regarding the REIT’s management fees, transactions with affiliates and distributions to investors. Now it appears that certain shareholders are asking Inland American to investigate similar claims.
According to an Investment News report, the first group of shareholders alleges that Inland American’s management “falsely reported the value of our common stock until 2010, caused us to purchase shares of our common stock from stockholders in excess of their value, and disguised returns of capital paid to stockholders as REIT income, resulting in the payment of fees to the business manager to which it was not entitled.”
The same article states that the Inland American board has formed a special litigation committee to investigate the demands of the stockholders.
Inland American is one of several large nontraded REITs that were sold to investors during the real estate bubble at $10 per share but have suffered dramatic drops in valuations since then. At the end of last year, the REIT said its estimated per share value was $6.93 per share, down from $7.22 per share at the end of 2011.
The White Law Group continues to investigate potential FINRA arbitration claims involving Inland American REIT. Brokerage firms have a fiduciary duty to their clients to perform due diligence on any investment prior to offering it for sale to their clients. Broker-dealers also are obligated to ensure that any recommendations they make are appropriate in light of the investor’s age, investment experience, net worth, and investment objectives. Based on the information now known about Inland American, it appears that the firm’s that recommended Inland American REIT to their clients may have done so improperly.
If you believe that you have suffered losses as a result of your investment in Inland American REIT, please call the securities attorneys of The White Law Group at 312/238-9650 for a free consultation.
The White Law Group is a national securities fraud, FINRA arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.