Investors of CIM Real Estate Finance Trust, formerly known as Cole Credit Property Trust IV, should be aware that Haselkorn & Thibaut (InvestmentFraudLawyers.com) is currently conducting an investigation into alleged improper sales of the investment. This non-traded REIT is planning to reposition its portfolio into commercial mortgage loans and intends to sell off its shopping center and real estate assets to facilitate this transition.
CIM Real Estate Finance Trust, Inc. (CMFT), formerly known as Cole Credit Property Trust IV, is a non-traded real estate investment trust (REIT) that initially sold shares for $10 each.
Several law firms, including Haselkorn & Thibaut (InvestmentFraudLawyers.com), are currently investigating potential legal claims on behalf of CMFT investors. The allegations involve improper sales of the investment to investors and possible securities fraud.
If you are a CIM REIT investor, you can contact 1-800-856-3352 for a free consultation with one of our experienced securities fraud lawyers to discuss the possibility of recovering your losses. Please note that there is limited time to file claims.
CIM Real Estate Tender Offers
Mackenzie Realty Capital Offer 2019
In a recent letter to investors, Mackenzie Realty Capital, Inc. has offered $4.79 per share until 12/30/19. The REIT estimates the share value at $8.65 per share (as of December 2018). However, the most recent trading range reported by a secondary market data source was in the range of $6.35 per share to $6.53 per share. You can refer to Central Trade and Transfer data for more information.
Comrit Investments 1 LP Tender Offer 2023
Comrit Investments 1 LP, a Tel Aviv-based investment fund company, has extended an unsolicited tender offer to purchase up to 22.4 million shares of CMFT stock for $4.61 per share. Comrit's potential proposal involves acquiring as many as 22 million shares in CIM Real Estate Finance Trust Inc. at a price of $4.57 per share. As of November 8, 2022, Comrit held approximately 3.1 million shares of CIM REIT's common stock, accounting for 0.7% of the total common stock. The net asset value (NAV) per share for CIM REIT was estimated at $6.57 on September 30, 2022, and it was recently traded on LODAS Markets at $5.42 per share. This may indicate significant losses for investors who originally purchased shares at $10 each.
CIM Real Estate Finance Trust Suitability and Supervision Issues
These investments are typically offered by financial advisors working at independent broker-dealer firms. They fall under the category of Direct Participation Programs (DPPs). Non-Traded REITs are generally considered risky and illiquid alternative investments. The United States Securities and Exchange Commission (SEC) defines them as "Reg D" offerings, also known as "private placements." Regulation D provides exemptions from the typical registration requirements of the Securities Act of 1933.
When selling a private placement, a brokerage firm has a duty to conduct a reasonable investigation of any recommended securities. In the past, FINRA has identified significant problems, including alleged fraud and sales practice abuse, in Regulation D offerings. The firm recommending the investment must also conduct a reasonable investigation into the issuer and its management, the future business prospects, the assets held by or to be acquired by the issuer, the total assets acquired by the issuer, the claims made by the issuer, and the intended use of the offering.
Failure to adequately investigate a private placement transaction can violate federal securities law antifraud provisions, FINRA Rule 2010 (adherence to just and equitable principles of trade), and Rule 2020 (prohibiting manipulative and fraudulent devices). FINRA has taken enforcement actions against firms and individuals that did not conduct a reasonable investigation before selling private placements to customers.
Broker-dealer firms must also supervise their brokers in the investigation and recommendations made to customers regarding private placement investments. Additional supervisory procedures are required for private placements, in addition to the typical supervision duties mandated by FINRA Rule 3010.
As reminded by FINRA Regulatory Notice 10-22, these additional supervisory procedures must be reasonably designed to ensure that a broker-dealer firm's registered representatives: (1) engage in an inquiry due diligence that is sufficiently rigorous to comply with legal and regulatory requirements; (2) perform the analysis required by FINRA Rule 2111; (3) qualify their customers as eligible to purchase securities offered pursuant to Regulation D; and (4) do not violate the antifraud provisions of federal securities laws or FINRA rules in connection with the preparation or distribution of offering documents or sales literature. It is crucial that each Reg. D offering is properly supervised before marketing it to other firms or selling it directly to customers.
CIM Group Investors Seeking to Recover Losses
For investors seeking to recover their investment losses, a private FINRA arbitration customer dispute may be an option. These disputes typically involve only paper discovery and no depositions. They offer a faster and more efficient alternative to traditional court litigation, providing a private forum to resolve disputes between shareholders more quickly.
About Haselkorn & Thibaut, P.A.
Haselkorn and Thibaut, P.A. is a nationwide law firm specializing in handling investment fraud and securities arbitration cases. With offices in Palm Beach, Florida, New York City, Phoenix, Arizona, and Cary, North Carolina, the firm's two founding partners have nearly 45 years of legal experience.
Haselkorn & Thibaut, P.A. has filed numerous private arbitration customer disputes with the Financial Industry Regulatory Association (FINRA) for customers who suffered investment losses related to issues similar to those mentioned in this article. These cases are typically handled on a contingency basis, with no cash recovery and no fees.
Experienced attorneys at Haselkorn & Thibaut, P.A. are available for a free consultation as a public service. For more information, call 1-800-856-3352 or visit our website at www.investmentfraudlawyers.com.