Investor Lawyers Blog
Law Office of Christopher J. Gray wishes to alert investors to the possibility that recommendations of Lightstone Value Plus (Lightstone) real estate investment trusts (REITs) by broker-dealers may be unsuitable, depending on the individual characteristics of investors and whether the broker had a reasonable basis for the recommendation.
Investments in REITs may be unsuitable for customers with low to moderate investment risk tolerances. Non-traded REITs, like Lightstone, carry greater risk of loss of principal invested 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 or for a relatively small proportion of an investor’s portfolio.
Broker-dealers have the duty to conduct proper due diligence in order to determine if an investment is suitable for a customer. This includes looking at the investors age, risk tolerance, net worth and investment experience.
Some specific risks regarding the Lightstone REIT can be found in its March 31, 2015 10K filing. For instance, Lightstone Value Plus REIT and its advisors have limited experience investing in real estate, having made only one real estate investment from October 2012-March 2015. Further, like other non-traded REITs Lightstone is illiquid, meaning that shares cannot be bought and sold on a public market. This means that it may be difficult for investors to sell their shares of Lightstone. Finally, some Lightstone REITs have suspended their share repurchase program, eliminating one possible avenue for sales of shares by investors.
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, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.