Posts tagged ‘KBS REIT recovery options’
Last month, a group of investors filed a prospective class action complaint against KBS Real Estate Investment Trust Inc. (or KBS REIT I) in the U.S. District Court for the Middle District of Florida in Fort Myers. The class action alleges that KBS made misrepresentations about the REIT, including its investment objectives, the dividend payment policy, and the value of the REIT’s investments.
It is being reported that this suit has caused at least one brokerage firm, Summit Brokerage Services, to suspend its selling agreements with sponsor KBS Holdings LLC. This news also raises questions regarding the ability of KBS REIT to succeed moving forward. In March, KBS REIT I announced a new valuation of $5.16 a share, down from $7.32 a share, and from the $10/share that original investors paid for the shares. KBS REIT has also cut its distribution to zero.
The White Law Group continues to file FINRA arbitration claims against the brokerage firms that recommended KBS REIT. These claims generally allege that the broker-dealers that sold KBS failed to perform the adequate due diligence on KBS REIT before offering it for sale to their clients.
Brokerage firms have a fiduciary duty to perform adequate due diligence on any investment before offering it for sale to its clients. Based on what is now known about KBS, it does not appear that the firms that sold KBS REIT performed the necessary due diligence on the offering.
Certainly, the extremely high commission offered by KBS REIT to brokerage firms for selling the product may explain the brokerage firms’ motivation in approving an investment with so many issues.
If you are a KBS REIT investor and you would like to discuss your litigation options with a REIT fraud attorney, please call The White Law Group at 312/238-9650 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 Boca Raton, Florida.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.