Investigating Potential Claims in Carter Validus Mission Critical REIT II
Did you lose money investing in Carter Validus Mission Critical REIT II at the recommendation of your broker? If so, the securities attorneys at The White Law Group may be able help you recover your losses through FINRA Arbitration.
SC Distributors (Strategic Capital) is a leading provider of select alternative investments to financial advisors and their clients, according to their website.
The company often raises money for investments through Reg D private placement offerings like the company did for Carter Validus Mission Critical REIT II. 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%.
Carter Validus Mission Critical REIT II, which invests in net leased data center and healthcare assets, went effective in May 2014 and has raised $1 billion in investor equity, as of July 18th. The REIT’s portfolio is comprised of 62 properties (20 data center and 42 healthcare properties) that were purchased for approximately $1.4 billion.
The board of Carter Validus Mission Critical REIT II Inc. has determined to terminate the company’s offering on November 24, 2017, according SEC filings. The company noted that the board may revise the offering termination date at its discretion.
The company registered a $350 million follow-on offering at the beginning of May 2017, which has not yet been declared effective by the SEC. The company originally planned to extend its offering to November 25th or until the follow-on was declared effective, whichever occurred first.
The Trouble with Reg D Private Placements
The trouble with Reg D private placements, like Carter Validus Mission Critical REIT II, is that they involve a high degree of risk and are typically sold as unregistered securities. That means they lack the same regulatory oversight as more traditional investment products like stocks or bonds.
The White Law Group continues to investigate the liability that brokerage firms may have for improperly selling private placements like Carter Validus Mission Critical REIT II.
Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations. They must 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.
Reg D private placements are also known for high sales commissions and due diligence fees. Brokers have an enormous incentive to push these products to unsuspecting investors who do not fully understand the risks. Sometimes brokers misrepresent the basic features of the products – usually focusing on the income potential and tax benefits while downplaying the risks.
Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes. 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.
Please contact The White Law Group at 1-888-637-5510 for a free consultation, to determine whether you may be able to recover investment losses incurred as a result of your purchase of Carter Validus Mission Critical REIT II or another SC Distributors’ private placement investment.
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.