Did you lose money investing in BR Capital?
Galvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing in BR Capital at the recommendation of their financial advisor. If you suffered losses, then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim against the broker-dealer and/or registered representative that recommended the investment.
What are Delaware Statutory Trusts (DST)?
A Delaware Statutory Trusts (DST) is a complex investment that is generally only suitable for sophisticated high-net worth investors, and then only in certain circumstances. A Delaware Statutory Trusts (DST) is a legally recognized trust that is set up for the purpose of business, but not necessarily in the U.S. state of Delaware. It may also be referred to as an Unincorporated Business Trust or UBO.
Delaware Statutory Trust (DST) investments are offered as replacement property for accredited investors seeking to defer their capital gains taxes through the use of a 1031 tax deferred exchange and as straight cash investments for those wishing to diversify their real estate holdings. The Delaware Statutory Trust (DST) property ownership structure allows the smaller investor to own a fractional interest in large, institutional quality, and professionally managed commercial property along with other investors, not as limited partners, but as individual owners within a Trust. Each owner receives their percentage share of the cash flow income, tax benefits, and appreciation, if any, of the entire property.
BR Capital Due Diligence Requirement
FINRA requires brokerage firms to conduct due diligence on investments, such as BR Capital, and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. FINRA Rule 2111(a) states that “a member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.”
Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability. Brokerage firms that fail to conduct adequate due diligence on investments they recommend, such as BR Capital, or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
Request a Free Consultation with a Securities Attorney
This information is all publicly available and is being provided to you by Galvin Legal, PLLC.
Galvin Legal, PLLC is a national securities arbitration, securities mediation, securities litigation, securities fraud, securities regulation and compliance, and investor protection law practice. For more information on Galvin Legal, PLLC and its representation of investors, please visit www.galvinlegal.com or call 1-800-405-5117.