Alternative Investments are different from typical stocks and bonds, as they are usually private, as opposed to being publicly-traded. Alternatives, including investments in real estate, hedge funds, and private equity can be complicated, difficult to sell, and not as closely monitored by regulators as traditional investments. They also often have high fees and can be extremely high-risk for investors.
National investment loss lawyers KlaymanToskes is investigating brokerage firms and financial advisors who unsuitably recommended Alternative Investments to their customers. Investors who have suffered losses due to a recommendation to invest in Alternative Investments by their brokerage firm/financial advisor are encouraged to contact KlaymanToskes immediately at 888-997-9956 or investigations@klaymantoskes.com to discuss legal options.
Business Development Companies (BDCs):
Delaware Statutory Trusts (DSTs):
Real Estate Investment Trusts (REITs):
Ponzi-like Schemes:
Private Placement Investments:
Alternative Investments may be unsuitable for investors with a need for financial security and an ability to readily access funds when necessary, such as the elderly and retirees, due to their illiquidity, high risk levels, lack of regulatory oversight, and complex nature.
Additionally, Alternative Investments may be misrepresented by brokers/advisors who fail to fully disclose the risks and liquidity issues to their customers. Conflicts of interest may occur when issuers incentivize brokers/investment advisors with commissions in return for promoting their Alternative Investment products to customers.
Alternative Investments typically involve many risks for investors, including the following:
Illiquidity: Alternative Investments commonly exhibit low liquidity, often spanning from a monthly withdrawal possibility to being locked in for over 12 years. As a result, these investments can pose challenges when it comes to selling them, and are likely only suitable for investors who can afford to have their funds tied up for long holding periods, sometimes decades. Investors who want to withdraw their funds early may face high and unexpected fees.
Regulatory Issues: Alternative Investments are usually private, as opposed to being publicly traded. These investments are often not subject to the same regulatory reporting requirements as other investments. The underlying assets of Alternative Investments are often difficult to evaluate, resulting in difficulties concerning pricing and transparency.
Complexity: Alternative Investments can be complex, demanding a higher degree of investigation and due diligence by brokers/financial advisors than other investments. Historically, alternative investments were exclusively accessible to institutional and affluent investors. Over recent years, however, the investments have surged in popularity and are progressively becoming part of the investment portfolios held by individual investors.
KlaymanToskes represents many investors pursuing FINRA Arbitration claims to recover investment losses due to unsuitable recommendations to invest in Alternative Investments. Currently, for example, the firm is seeking to recover up to $12 million in investment losses on the behalf of several customers of broker Russ Conrad a/k/a Gilbert Russell Conrad, in connection with his unsuitable recommendations to invest in illiquid Alternative Investments, many of which have since filed for bankruptcy, including Hospitality Investors Trust, Inc. (formerly, American Realty Capital REIT).
Investors who suffered losses due to unsuitable Alternative Investment recommendations are encouraged to contact attorney Lawrence L. Klayman, Esq. at (888) 997-9956 or lawrence@klaymantoskes.com for a free and confidential consultation to discuss legal options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.