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REIT-Related Fraud

A real estate investment trust, or “REIT”, is a specialized entity that owns and often manages income-producing real estate.  Many REITs are publically traded, but there are also non-traded REITs.

Brokerages and investment firms market non-traded (or private) REITs as secure and stable investments with high-yield dividends.  However, they often have large up-front costs, ongoing fees, and are not traded on a public exchange, which makes them very difficult to sell should an investor decided to cut his or her losses.

In recent years, misleading or dishonest disclosures regarding REIT valuations have been a prominent issue, gaining the attention of many securities class action attorneys.  When persons selling REIT shares issue misleading information to entice investors, a securities litigation attorney may initiate a securities class action lawsuit on investors’ behalf, seeking to recover their losses.  Potentially actionable behavior is not just limited to statements regarding valuation, but may also arise from statements that cause investors to anticipating higher than realistic returns.

REITs are complex, and require deep knowledge of the asset class in order to understand any particular REIT’s structure, and determine whether any of the various entities involved engaged in legally actionable conduct.  Investors that are victim of a fraudulent REIT require a securities litigation attorney with comprehensive institutional knowledge in order to evaluate all possible legal claims and to navigate the best strategy towards a speedy and just resolution.

If you purchased shares of a REIT (publicly traded or not), and have concerns regarding information provided by those marketing the REIT, please contact the securities class action attorneys at Glancy Prongay & Murray.

Court Recognition

“And without question, the Court is of the opinion that the value of benefit that’s been conferred to the class is extremely sizable and that this Court is certainly aware that the skill and efficiency of plaintiff’s counsel is what attributed to this settlement, and they are learned securities counsel. The Court is mindful of that, and as a result they were able to sort of weed their way through the complex issues in this case, and also to bring this about — bring about a settlement rather in short order as these matters go. So the Court certainly attributes that to counsel’s skill and efficiency, as well as the ability to work with the adversaries in this matter.”

–Hon. Susan D. Wigention, U.S. District Judge, District of New Jersey

“Class Counsel has conducted the litigation and achieved the Settlement in good faith and with skill, perseverance and diligent advocacy”

— Hon. Donovan W. Frank, U.S. District Judge, District of Minnesota

“The court finds that the Settlement Fund… created by Class Counsel is an exceptional result… The settlement is significantly above the average securities class action settlement when measured as a percentage of losses recovered… The court finds that Class Counsel, particularly Co-Lead Counsel, exerted tremendous effort on behalf of the class in the prosecution of this action… The Court finds that Class Counsel skillfully prosecuted this action, particularly given that this case was unusually complex relative to most securities fraud class actions. ”

–Hon. Dickran M. Tevrizian (Ret.), U.S. District Court Judge, Central District of California

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