NEW YORK, NY / ACCESSWIRE / October 4, 2024 / National investment loss and securities law firm KlaymanToskes has launched an investigation into brokerage firms and financial advisors that may have unsuitably recommended investments in Creative Media & Community Trust Corporation (NASDAQ:CMCT) following the REIT’s steep 75% decline over the past year, reaching a 52-week low stock price of $0.42 per share. Investors who suffered losses of $100,000 or more as a result of a recommendation by their broker/investment advisor should contact the law firm immediately at 888-997-9956. Investors with self-directed accounts who did not rely on the advice of a financial advisor are not eligible for our representation.
Creative Media & Community Trust Corporation’s preferred stock, previously non-traded and part of a REIT offering, underwent a redemption in the second quarter of 2024. Approximately 25% of CMCT’s outstanding preferred shares were converted. Many investors chose, or were compelled, to receive their redemption in common stock rather than cash due to limited liquidity. KlaymanToskes’ investigation has led the firm to believe that as a result, a disproportionate number of CMCT shares were issued in lieu of cash, exacerbating market pressures and leading to significant investor losses.
As overwhelming demand by investors to sell these shares surged, CMCT’s common stock faced significant downward pressure. By the time the shares were delivered into investors’ accounts, the stock had already experienced a steep decline, leaving investors with positions significantly below their initial investment values. KlaymanToskes is investigating whether brokerage firms and financial advisors adequately disclosed the liquidity risks of investments in CMCT, and the potential impacts of the preferred stock redemption.
Financial advisors and their firms must act in the best interest of their customers and are responsible for providing suitable investment advice. Investment firms may be held liable for any losses incurred by their customers if they fail to act in best interest of their customers, make unsuitable investment recommendations, misrepresent or omit material facts, and/or an overconcentrate the customer’s portfolio in one particular investment, class, or market sector. Further, financial professionals and their firms cannot disregard a customer’s risk-tolerance when making investment recommendations.
Investors who suffered investment losses in Creative Media & Community Trust Corporation (NASDAQ:CMCT) due to unsuitable recommendations by their financial advisor are encouraged to contact attorney Steven D. Toskes at (888) 997-9956 or by email at investigations@klaymantoskes.com in furtherance of our investigation.
About KlaymanToskes
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
Contact
KlaymanToskes, P.A.
Steven D. Toskes, Esq.
888-997-9956
investigations@klaymantoskes.com
www.klaymantoskes.com