Newbridge Securities Sold Hospitality Investors Trust To Customers

HIT REIT Investors Continue to Report Investment Losses

It is January 2022 and Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) continues to offer free, no-obligation case consultations to investors who suffered losses in Hospitality Investors Trust.

The non-traded real estate investment trust (non-traded REIT), also known as HIT REIT, is believed to have cost some investors losses of up to 95%. Our savvy securities attorneys are here to help determine whether you have grounds for a FINRA arbitration claim to pursue damages.

Broker-dealers and their financial advisors can be held financially liable for their role in marketing and selling this risky, illiquid investment to investors. This is especially true for those investors who are conservative, unsophisticated or are seniors.

Brokerage firm Newbridge Securities was named in a FINRA arbitration case by a retired couple alleging losses in HIT REIT, ARC New York City REIT, and Business Development Corporation of America (BDCA). Claiming negligence, breach of fiduciary duty, and supervisory failures, they are requesting up to $175K in damages. 

What is Hospitality Investors Trust?

Hospitality Investors Trust owns several Hyatt, Marriott, and Hilton hotel properties. While shares were originally sold at $25/share, that price has gone down in recent years. Helped along in part by COVID-19, which, for a time, shuttered the hospitality and travel industries.

By March 2021, Hospitality Investors Trust shares were selling on secondary market Central Trade & Transfer for 46 cents/share. Hospitality Investors Trust filed for Chapter 11 bankruptcy protection a few months later. HIT REIT investors were told that their stocks would get canceled in return for contingent cash payments of no more than $6/common stock share.

Lack of Supervision Led to Unsuitable Selling of Hospitality Investors Trust

HIT REIT was always unsuitable for investors who have low-risk tolerance levels and conservative investing goals. Even before its financial woes, Hospitality Investors Trust shareholders would have found it difficult to offload this investment and usually at a loss.

This did not stop brokerage firms and their registered representatives from promoting and selling shares in this non-traded REIT to many retail customers. The HIT REIT should only be marketed to wealthy and sophisticated investors. Yet they too have also suffered significant losses in this risky, illiquid investment.

The broker-dealers involved should have been supervising their employees’ activities in customers’ accounts. The high commissions and dealer management fees may have been an incentive for financial advisors to push a product that would earn them and their firms’ additional money.

Knowledgeable HIT REIT Investors Lawyers

When lax supervision or inadequate training or standards leads to broker misconduct that results in losses, financial firms should pay the investors the damages they are owed. Whether you are a retail investor or high-net-worth individual investor, allow our seasoned HIT REIT investment attorneys at SSEK Law Firm to help you determine whether you have grounds for a claim. Call (800) 259-9010 or contact us online.