This non-traded REIT is allegedly planning to reposition its portfolio into commercial mortgage loans and intends to sell off its portfolio of shopping center and real estate assets, to do so. The allegations involve improper sales of the investment to investors and possible securities fraud. CIM REIT investors can for a free consultation with one of our experienced securities fraud lawyers on recovery losses.
There is limited time to file claims. In a recent letter to investors, Mackenzie Realty Capital, Inc. See Central Trade and Transfer data. Comrit Investments 1 LP, a Tel Aviv-based investment fund company, has reportedly extended an unsolicited tender offer to purchase up to As of November 8, , Comrit held around 3. These investments are generally offered by financial advisors working at independent broker-dealer firms. A brokerage firm selling a private placement still has a duty to conduct a reasonable investigation of any securities it recommends.
FINRA found problems in the past concerning some private placements were significant and included alledged fraud and sales practice abuse in Regulation D offerings. With private placements, the firm recommending the investment to a customer must also conduct a reasonable investigation into the issuer and its management, the future business prospects of the issuer, the assets held by or to be, total assets acquired by the issuer, the claims being made by the issuer, and the intended use of the offering.
Failure of a firm to adequately investigate a given private placement transaction can violate federal securities law antifraud provisions, FINRA Rule adherence to just and equitable principles of trade , and Rule prohibiting manipulative and fraudulent devices. In addition to various cases and enforcement actions cited in Regulatory Notice and its endnotes , another sweep by FINRA resulted in more crackdowns on firms and affiliates and individuals that did not conduct a reasonable investigation before selling private placements to customers.
Also, concerning private placement investments, broker-dealer firms still must supervise their brokers in the investigation and recommendations being made to invest with the customer.
