Law Office of Christopher J. Gray wishes to alert investors to the possibility that recommendations to purchase shares of United Mortgage Trust (United Mortgage) real estate investment trust (REIT) by broker-dealers may be unsuitable, depending on the individual characteristics of investors and whether the broker had a reasonable basis for the recommendation.
Non-traded REITs, like United Mortgage, carry greater risk than more traditional investments such as stocks and bonds. Because of the greater risk attached to these investments, they are better suited for sophisticated and institutional investors. Broker-dealers have the duty to conduct a proper inquiry in order to determine if an investment is suitable for a customer, and must have a reasonable basis for all recommendations. This inquiry includes looking at the investors age, risk tolerance, net worth and investment experience and determining whether a particular investment is suitable for a given investor.
Some specific risks regarding the United Mortgage Trust can be found in its March 31, 2015 10K filed with the Securities and Exchange Commission:
– Recent Developments in the Residential Sub-prime Mortgage Market Could Adversely Affect Our Results.
– Our investments are subject to a higher risk of default than conventional mortgage loans.
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– We purchase mortgage investments from affiliates of our Advisor, which may present a conflict of interest from our Advisor.
If you believe you have been the victim of stockbroker misconduct, you may wish to consult an attorney to find out more about your legal rights and options. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.