SEC Charges Real Estate Executive With Defrauding Vestin REIT Investors
According to the Securities and Exchange Commission on July 30, the regulator is charging an executive of the Parking REIT, and his wholly owned investment advisory firm, Vestin Mortgage LLC with fraud.
The SEC alleges that since at least 2012, the executive “fraudulently enriched himself and one of the REITs he controlled, The Parking REIT”, at the expense of two publicly traded REITs that he earlier had founded, Vestin Realty Mortgage I and Vestin Realty Mortgage II.
According to the complaint, the executive allegedly funneled $29 million from Vestin Realty Mortgage I and Vestin Realty Mortgage II into The Parking REIT and then purportedly initiated “money-losing transactions in which the same six buildings were repeatedly re-sold”, all to allegedly benefit himself and The Parking REIT.
The SEC alleges that the executive violated his fiduciary duties to the Vestin REITs including, allegations that he made two separate securities transactions to get the companies to pay him almost $10 million. The executive was also allegedly charged with misleading investors by having the Vestin REITs make false and misleading statements in their public filings, which purportedly hid his alleged self-dealing.
The SEC’s complaint reportedly seeks disgorgement plus pre-judgment interest, penalties, permanent injunctions, and industry, penny stock, and officer and director bars against the executive.
For more information on the White Law Group’s investigations involving the Parking REIT please see:
Recovery of Investment Losses
The Parking REIT, a non-traded REIT formed in December 2017 by the merger of MVP REIT and MVP REIT II, invests primarily in parking lots and garages in the United States.
The White Law Group has received numerous calls from investors regarding investment losses in the Parking REIT. The REIT has had numerous problems in the past few years, including a class action lawsuit, failure to file timely financial reports and a declining NAV. The REIT’s original offering price was $25 per share, yet the most recent NAV as of January 8, 2021 was $11.75 per share.
Non-traded REITs, like The Parking REIT, are often 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 who can properly evaluate the risks of the investment and afford substantial losses.
If you have suffered losses investing in The Parking REIT or Vestin Mortgage REIT I or II, and would like a free consultation with a securities attorney, please call The White Law Group at 1-888-637-5510.
The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois. For more information on The White Law Group, visit www.whitesecuritieslaw.com.