Did Brokerage Firms Unsuitably Recommend LRT Leesburg DST To Investors?
Our Delaware Statutory Trust Attorneys Loss Attorneys Are Investigating
If you are an investor who lost money in LRT Leesburg DST, which was recommended to you by a financial advisor, contact Shepherd Smith Edwards and Kantas (investorlawyers.com) today. Our Delaware Statutory Trust Investment Loss Recovery Law Firm is offering a free, no obligation case assessment to help determine whether you may have grounds for a legal claim against your broker-dealer.
LRT Leesburg is a private placement Delaware Statutory Trust in South Carolina. Filings with the Securities Exchange Commission (SEC) noted that the DST’s total investment offering, made in 2022, has since sold at nearly $17M.
This is a high-risk, illiquid, Regulation D offering that only should have been marketed to accredited investors that can handle having their money locked up for long periods of time. Now, there are growing concerns that there were financial advisors that may have unsuitably recommended LRT Leesburg DST, including to inexperienced investors, while misrepresenting the risks involved.
What Are The Risks Tied To LRT Leesburg DST and Other Delaware Statutory Trusts?
Private placement, Reg D offerings can be highly volatile investments, and they aren’t subject to the same SEC disclosure requirements that public investment offerings must abide by. A Delaware Statutory Trusts is a real estate investment trust set up for business purposes. It can be offered as replacement property to accredited investors seeking to defer capital gains tax via the 1031 Tax Deferred Exchange or as a cash investment for those wanting to diversify their real estate investments.
DST investors are given a chance to own a fractional interest in institutional quality, professionally run commercial properties. Owners are supposed to get a percentage share of appreciation, income, and tax benefits without having to take part in running the properties. Generally unsuitable for retail investors, typically to become a Delaware Statutory Trust investor, a $100K minimum investment is required.
As we have mentioned, there are risks involved, such as:
- There will likely be no proceeds unless an asset is sold, which could take years.
- A DST investor is a silent partner who has no say when it comes to property operations or dispositions.
- Following the formal establishment of a Delaware Statutory Trust, additional equity distributions cannot be made, existing loans cannot be modified, and new loans cannot be added.
- No secondary market is available for reselling a DST.
- Economic volatility might hugely impact this kind of investment.
Why Can Your Broker Be Held Liable For Your LRT Leesberg DST Loss?
Brokerage firms can earn at least 7% in commissions for selling a Delaware Statutory Trust to investors. This can compel some financial advisors to unsuitably recommend a DST to a customer for whom this type of investment is too risky and/or not in line with their financial goals. Some stockbrokers may misrepresent or downplay the risks.
Why Hire Our Delaware Statutory Trust Attorneys?
Shepherd Smith Edwards and Kantas Delaware Statutory Trust Attorneys represent Delaware Statutory Trust investors in holding financial advisors liable for breaching their fiduciary duty to them or engaging in some other type of broker fraud or negligence. We are experienced in representing all kinds of Reg D private placement investors in FINRA arbitration, litigation, and mediation. We understand the complex nature of these types of claims and we know how to maximize your chances for receiving damages.
More than 90% percent of our clients have received full or partial financial recovery against the brokerage firms or investment advisors that were liable. When you retain us, know that you will receive seasoned securities representation and personalized attention.
Call our Delaware Statutory Trust Attorneys at (800) 259-9010 or fill out this contact form.