Recovery of Investment Losses in Black Creek Diversified Property Fund
The White Law Group continues to investigate FINRA arbitration claims involving Black Creek Diversified Property Fund f/k/a Dividend Capital Diversified Property Fund.
Unfortunately for investors it appears that many financial advisors/brokerage firms that sold REITs such as Black Creek Diversified Property Fund, may have understated or misrepresented the risks and liquidity problems.
According to its filings with SEC, the REIT is a Maryland corporation located in Denver, Colorado. The REIT was formed to invest in a diverse portfolio of real property and real estate-related investments. The Company’s targeted investments include direct investments in real properties. They also invest in securities, including securities issued by other real estate companies and mortgage loans secured by income-producing real estate.
Secondary Market Listing Price
According to Central Trade & Transfer, a secondary market website, shares of Black Creek Diversified Property Fund are listed for just $7.00 per share. Unfortunately for many investors, it appears that the secondary market price would represent a loss on their initial capital investment. The original offering price was $10.00/share.
Prior to making recommendations to an individual investor, brokerage firms are required by the Financial Industry Regulatory Authority (FINRA) to disclose all the risks of an investment. Recommendations should only be made if the investment is suitable for an individual investor given their age, investment objections, investment experience and risk tolerance.
Brokerage firms that do not perform adequate due diligence on an investment and/or make unsuitable recommendations can be held accountable for investment losses through FINRA arbitration.
According to Dividend Capital’s prospectus dated January 27, 2006, the REIT paid 6% commission to the brokerage firm that sold the product.
Additionally, approximately 2.5% dealer manager fee and up to 1.0% distribution fee was also deducted from the primary offering price, and up to 1.5% of the proceeds from the sale of shares may have been allocated to the Advisor (Dividend Capital Total Advisors Group LLC) for incurring or paying offering expenses.
These high commissions could be a motivating factor for unscrupulous financial advisors to sell the REIT regardless of whether the investment is in line with the client’s investment objectives and profile. Moreover, the total commissions and expenses make it difficult for the REIT to perform in line with the market.
Free Consultation with a Securities Attorney
If you invested in a Black Creek Diversified Property Fund and would like to discuss your litigation options, 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.