Investor Lawyers Blog
Investment fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses in CommonWealth REIT. Allegedly, between January 10, 2012, and August 8, 2012, CommonWealth issued false and misleading statements regarding its financial standing and prospects which, if proved to be true, would be a violation of the Securities Exchange Act of 1934.
The CommonWealth real estate investment trust primarily owns and operates real estate, such as industrial buildings, office buildings and leased industrial land. Allegations currently being investigated by securities arbitration lawyers are that CommonWealth failed to disclose certain facts, including the fact that leased office spaces had fallen below expectations, existing tenants were receiving concessions which were eroding CommonWealth’s income and, as a result, CommonWealth’s positive statements about its occupancy rate, dividend payout and leverage ratio were not reasonably founded.
An announcement on August 8, 2012, stated that CommonWealth would likely be reducing its dividend payment. Among the reasons cited for this reduction were that its available cash for distribution payout ratio had increased and its occupancy rate had decreased. Following this announcement, the per share price of CommonWealth fell $1.57, or 9 percent, closing at $16.48 that day. Investment fraud lawyers say that by October 26, 2012, shares were trading at $13.58, a 52-week low. Furthermore, while CommonWealth REIT’s annual revenue increased from 2008 to 2011, its net income fell in that same period from $244.65 million to $109.98 million, a decline of $134.67 million.