January 7, 2017 Comments (0) Current Investigations

Moody National REIT II Amends Share Repurchase Program

(Last Updated On: January 12, 2017)

Have you suffered losses investing in Moody National REIT I or Moody National REIT II? If so, The White Law Group may be able to help you by filing a FINRA Resolution claim against the brokerage firm that sold you the investment.

According to their website, Moody National Companies, established in 1996, is a full-service commercial real estate firm. Since the beginning, “Moody National has remained focused on identifying and developing investment opportunities that offer long-term asset preservation as well as stable and predictable cash flows.”

In October, the board of directors of Moody National REIT I, Inc. announced the suspension of the common stock distribution reinvestment plan.  The suspension became effective beginning with distributions made in November 2016.

Last week the board of directors of Moody National REIT II, Inc. (Moody II) amended the share repurchase program (SRP), effective February 6, 2017, to allow the board to amend, suspend or terminate the SRP at any time with 10 days’ prior written notice to Moody II shareholders. This is unfortunate news for investors.

A real estate investment trust (REIT) is a company that owns, and in most cases, operates income-producing real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers and hotels. Some REITs also engage in financing real estate. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks.

REITs are complex and high risk investments that are really only suitable for sophisticated investors. It is the duty of the brokerage firm to perform due diligence on any investment and to ensure that the investment is suitable for a particular investor in light of that investor’s age, investment objectives, income, net worth, and investment experience. Given the current risk of devaluation of these REITs, such investments are likely only suitable for wealthy and/or sophisticated investors.

Financial advisors have a fiduciary duty to put their client’s needs ahead of their own.  If a stockbroker recommends an investment that is unsuitable for the client or fails to perform adequate due diligence on an investment, the advisor and his/her firm can be held liable for the resulting losses.

The White Law Group continues to investigate the liability that brokerage firms have for unsuitably recommending REITs such as Moody National REIT I and Moody National REIT II.

 If you believe that you are the victim of your advisor recommending a REIT to you inappropriately, please call the securities attorneys of The White Law Group at (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.  For more information on The White Law Group visit http://www.whitesecuritieslaw.com.