Posts tagged ‘Wells REIT investigation’
More Bad News for Wells REIT
It is being reported that Wells Real Estate Funds recently laid off its executive sales staff in a move to cut costs. This is just more bad news for Wells REIT owners worried about whether their investments will bounce back after price drops and dividend cuts.
The White Law Group continues to file FINRA arbitration claims against the brokerage firms that recommended Wells REIT. These claims generally allege that the broker-dealers that sold Wells REIT failed to perform the adequate due diligence on Wells 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 Wells REIT, it does not appear that the firms that sold Wells REIT performed the necessary due diligence on the offering.
Certainly, the extremely high commission offered by Wells 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 Wells 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.
Wells Investment Securities Fined by FINRA for Misleading Marketing of REIT
According to a public release, FINRA has fined Wells Investment Securities, who is “the dealer-manager and wholesaler for the public offering of Wells Timberland REIT,” “$300,000 for using misleading marketing materials in the sale of Wells Timberland REIT, Inc., a non-traded Real Estate Investment Trust (REIT).” Wells Investment Securities has not admitted or denied FINRA’s findings.
If you have invested in the Wells Timberland REIT or another risky non-traded Real Estate Investment Trust (REIT), The White Law Group may be able to help you recover your investment through FINRA arbitration. The White Law Group has assisted many investors who have struggled with nontraded REIT investments and is dedicated to representing investors through the FINRA dispute resolution process. Our firm has found that brokers and brokerage firms have often failed to adequately disclose nontraded investments as illiquid and improperly represented the investments as safe and secure. Brokers that fail in their responsibilities to customers may be have liability for claims to recover investment losses.
FINRA’s recent investigation and decision to fine Wells Investment Securities involved their review, approval and distribution of marketing materials related to the offering of the Wells Timberland REIT. According to FINRA, “from May 2007 through September 2009, Wells reviewed, approved and distributed 116 advertising and sales materials containing misleading, unwarranted or exaggerated statements.”
One of the issues FINRA found with the materials was that, “The majority of the advertisements and sales literature failed to disclose the significance of Wells Timberland’s non-REIT status or suggested that Wells Timberland was a REIT at a time when in fact it had not qualified as a REIT” and that the tax benefits generally associated with REITs would not be available to investors until the Wells Timberland investment qualified as a REIT. Perhaps even more pertinent to investors was that FINRA found some statements regarding the investments diversification, distributions and redemptions to be misleading.
If you investment in the Wells Timberland REIT or another Wells REIT product through Wells Investment Securities directly or another FINRA registered broker-dealer and would like to speak to a securities attorney about your potential to recover investment losses through FINRA arbitration please contact our Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.
Can You Recover Wells REIT II Investment Losses after the Share Price Drop?
Are you an investor in the Wells Real Estate Investment Trust II (Wells REIT II) and are disturbed by the recent announcement that the value of your shares in Wells REIT II has dropped more than 25% from the par value of $10 to an estimated $7.47 per share? Are you wondering if you can recover your investment losses in Wells REIT II? The White Law Group may be able to assist you in recovering your non-traded REIT damages through the FINRA arbitration process.
The investmentnews.com reported the drop in share price on November 9th and stated that this drop “highlights regulators’ concerns with nontraded real estate investment trusts.” Among the issues that regulators are concerned with is how the values of shares are listed on non-traded REIT investor statements. We have previously written about a FINRA proposal that is an attempt to require more transparency in how shares are reflected on customer statements and regulate how fast valuations of the investments must take place after the initial offering (http://www.
The reason why FINRA is pushing this proposal is in part because investors in non-traded REITs are often left in the dark about how much their investments are truly worth. While, as the investmentnews.com reports, Wells REIT II announced a new estimated value for the shares “in line with industry standards” and as they promised they would before the end of the year, it also shows how investors can realize that their investment in a non-traded REIT is worth far less than they anticipated overnight. The FINRA proposal also wants the costs and commissions involved in the purchase of non-traded REITs to be reflected in the shares’ initial par value.
This proposal is just one reason FINRA has been paying attention to non-traded REITs this year. They are also paying close attention to the ways in which broker-dealers marketed and sold the products to investors. In many cases, and notwithstanding the risk of REIT investments, broker-dealers marketed these investments as safe and secure.
REITs typically pay a high commission – up to as much as 15% – which may, in some cases, explain the stockbroker’s motivation in recommending the REIT investment to the investor. Brokerage firms have a fiduciary duty to perform due diligence on any investment and to insure that an investment is appropriate in light of the investor’s age, investment experience, and investment objectives. If a broker fails in this responsibility, investors may have an actionable claim to recover their losses in a product in a claim through FINRA dispute resolution.
If you are concerned about your investment in the Wells Real Estate Investment Trust II (Wells REIT II) and would like to speak to a securities attorney about your ability to recover your investment losses through FINRA please call our Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.