The White Law Group is investigating potential securities fraud claims involving broker-dealers’ improper recommendation of REIT investments such as CNL Growth Properties.
On October 31, 2017, CNL Growth Properties, Inc. terminated its securities registration following the final liquidation payments to shareholders on October 24, 2017.
The Risk of Non-Traded REITs
The trouble with non-traded real estate investment trusts (REITs) like, CNL Growth Properties, is that they lack liquidity and are inherently risky. Compared to traditional investments, such as stocks, bonds and mutual funds, non-traded REITs are more complex and are better suited for investors that can afford to risk the total losses of their investment.
Brokers often earn extremely high sales commission selling non-traded REITs, sometimes as high as 15%. Unfortunately, the high sales commissions associated with non-traded REITs often provides some broker dealers with enough incentive to overlook suitability requirements.
Additionally, investors looking to sell a private placement investment often have difficulty finding a buyer, and can suffer significant losses on the sale.
Brokers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor and are in line with the clients risk tolerance, age, net worth, and investment experience.
If a brokerage firm makes unsuitable investment recommendations or fails to adequately disclose the risks associated with an investment they may be liable for investment losses through FINRA arbitration.
To determine whether you may be able to recover investment losses incurred as a result of your purchase CNL Growth Properties, please contact 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 firm, visit www.WhiteSecuritiesLaw.com.