Hospitality Investors Trust REIT Losses: Inexperienced Investor Entrusted Broker-Dealer With Life Savings
Our non-traded real estate investment trust (non-traded REIT) lawyers are representing a California retiree in her FINRA arbitration claim against NPB Financial Group. The claimant, an older widow with health issues, suffered losses to her life savings in Hospitality Investors Trust (HIT REIT).
Her ex-NPB Financial broker, who had recommended this risky investment vehicle, has since been barred by FINRA. This bar was for the same reasons that the claimant decided to file her case. The investor is requesting up to six figures in damages from the brokerage firm.
Contact our Hospitality Investors Trust attorneys if you suffered losses after your broker-dealer recommended this investment vehicle. Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) represents investors nationwide.
Broker Sold Unsuitable Risky Privately Traded Investments to Investor Wanting No Risk
This retiree investor alleges misrepresentations, omissions, unsuitability, gross negligence, and breach of fiduciary duty. From the start, this claimant made it clear that she didn’t know much, if anything, about investing. She was adamant that she was averse to taking on undue risk.
Her then-NPB broker gave reassurances that she would manage her savings according to her requests and that all recommendations made were safe. This financial advisor even compared REIT recommendations to fixed-income products that garner steady income while not posing many risks.
Despite all of these promises, this now barred registered representative proceeded to steer this older claimant toward Hospitality Investors Trust REIT and other privately traded products. These products are best suited for accredited, sophisticated investors. These investments were completely unsuitable recommendations for an unsophisticated investor.
It is not surprising that this agent has a record of selling unsuitable investments to customers, particularly senior investors.
Not only did she market and sell this retiree these illiquid, risky investments, but also she went on to overconcentrate this investor’s account, including an IRA, with them. Meanwhile, this stockbroker and the firm earned large commissions even as the claimant suffered needless losses.
NPB Financial and its Duty As Broker-Dealer: Can They Be Held Accountable?
As the financial firm where this investor’s broker was registered, NPB Financial had a duty to properly oversee this customer’s accounts and ensure that only suitable investments were marketed and sold to her. If the broker-dealer had carried out its supervisory responsibilities, it might have prevented this investor from suffering such significant investment losses.
What is HIT REIT?
Previously known as American Realty Capital Hospital Trust (ARC Hospitality Trust), this publicly registered non-traded real estate investment trust owns many well-known hotel properties. These properties include Marriott, Hilton, and Hyatt Hotel.
Hospitality Investors Trust REIT shares were initially offered for $25/share. HIT REIT filed for bankruptcy protection in 2021, and stocks were canceled in return for contingent cash payments of no higher than $6/common stock share. Yet, shareholders had already been losing money for some time. There are HIT REIT investors who have reported losses of over 95%.
Seasoned Non-Traded REIT Lawyers
Our HIT REIT investment attorneys represent investors throughout the US. To schedule your free, no-obligation case consultation so that we can help you explore your legal options, call (800) 259-9010. You can also speak to our California HIT real estate investment trust attorneys at (619) 550-4847.