Stock fraud lawyers are currently investigating potential claims on behalf of investors who purchased Sun 1031 TICs or other risky tenant-in-common investments. In many cases, broker-dealers improperly recommended these investments to clients for whom the investment was unsuitable.
TICs became popular in 2002, following a ruling by the Internal Revenue Service that allowed capital gains to be deferred by investors. In this property ownership, a fractional interest is owned by two or more parties. However, following the real estate crisis, TICs saw a significant decline in value. According to stock fraud lawyers, liquidity problems and high risks are not uncommon with TICs and, in many cases, these risks are misrepresented to the clients. Instead, brokers often focus on the promised income stream when persuading clients to purchase TICs. Because of the potential income stream associated with TICs, these investments can be attractive to retired investors who are not informed of the risks involved.
According to investment fraud lawyers, prior to recommending an investment to a client, brokers and firms are required to perform the necessary due diligence to establish whether the investment is suitable for the client, given their age, investment objectives and risk tolerance. This investment was clearly unsuitable for many of the investors who received the recommendation to purchase the TIC and, in some cases, the necessary due diligence likely went unperformed. Because TICs usually pay a high commission — often as much as 10 percent — many brokers recommend TICs to investors despite their unsuitability.
If you were unsuitably recommended the Sun 1031 TIC or any other risky TIC investment and you suffered significant losses as a result, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact an investment fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.