August 25, 2016 Comments (0) Blog, Current Investigations

Latest News on CNL Growth Properties, Inc.

(Last Updated On: September 1, 2016)

Have you suffered investment losses in CNL Growth Properties? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

According to their website, CNL Growth Properties is a non-traded real estate investment trust (REIT) that provides an opportunity to invest in the seniors housing and healthcare markets sponsored by CNL.

On August 24, 2016, CNL Growth Properties, Inc. (CNL Growth) announced a special distribution of $2.35 per share payable on or near August 30, 2016.  The special distribution, authorized by the board of directors, marks the first distribution under CNL Growth’s plan of liquidation and dissolution, which was approved by shareholders on August 4, 2016.  CNL Growth anticipates that the orderly liquidation and dissolution of the company may take approximately 12 to 24 months to complete.

CNL often raises money for investments through Reg D private placement offerings like the company did for CNL Growth Properties.  These Reg D private placements are then typically sold by brokerage firms in exchange for a large up front commission, usually between 7-10%, as well as additional “due diligence fees” that can range from 1-3%.

For more information on The White Law Group’s investigation in to potential CNL Growth Properties claims, click here. 

The trouble with alternative investment products, like CNL Growth Properties, is that they involve a high degree of risk and are typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds.

The White Law Group is investigating the liability that brokerage firms may have for improperly selling private placements like CNL Growth Properties.

Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations to ensure that each investment recommendation that is made is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.

However, another problem with Reg D private placements is that the high sales commissions and due diligence fees the brokers earn for selling such products sometimes can provide brokers with an enormous incentive to push the product to unsuspecting investors who do not fully understand the risks of these types of investments or to outright misrepresent the basic features of the products – usually focusing on the income potential while downplaying the risks.

Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes and if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.

To determine whether you may be able to recover investment losses incurred as a result of your purchase of CNL Growth Properties or another CNL private placement investment, please contact The White Law Group at 1-888-637-5510 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. The firm represents investors throughout the country in claims against their brokerage firm.

For more information on the firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.