Did you lose money investing in American Realty Capital Retail Centers of America?
Galvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing in American Realty Capital Retail Centers of America at the recommendation of their financial advisor. If you suffered losses investing in the investment, 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.
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
UPDATE 2/15/17: The shareholders of Retail Centers of America and American Finance Trust voted and approved the proposed merger transaction that was announced last September. American Finance Trust will acquire all of the outstanding common stock of Retail Centers of America at an exchange ration of 0.385 shares of American Finance Trust’s common stock per share of Retail Centers of America’s common stock, plus a cash payment equal to $0.95 per share of Retail Centers of America’s common stock.
UPDATE 2/13/17: Coastal Realty Business Trust, an affiliate of real estate investment firm MacKenzie Capital Management LP, has completed its recent tender offer. The company had offered to acquire up to one million shares of the REIT at $5.50 per share, but was able to purchase just 7,600 shares. ARC Retail Centers of America’s board had unanimously recommended that its shareholders reject the offer, which was $3.50 per share less than the estimated NAV per share of $9.00. The tender offer was $4.76 per share less than the estimated merger consideration of $10.26 that shareholders are expected to receive should the proposed merger with American Finance Trust be completed. The proposed merger has been excoriated by investment bank Robert A. Stanger & Co. and is the subject of a class action lawsuit filed by its shareholders.
UPDATE 2/2/17: Shareholder’s of the REIT have filed a class action lawsuit in the United States District Court for the District of Maryland. They are alleging that the REIT’s officers and directors are soliciting shareholders’ approval of the proposed merger with American Finance Trust through a materially false and misleading proxy statement, and in breach of their fiduciary duties. They are demanding a jury trial.
UPDATE 1/4/17: On Tuesday, Robert A. Stanger & Co. blasted the proposed merger between American Realty Capital’s Retail Centers of America and American Finance Trust in a special report. In the report, Stanger outlined what it believes are serious issues with the proposed merger, including inadequate compensation to investors, an onerous 20-year post-merger management agreement with American Realty Capital, the elimination of investor protections, and potential conflicts of interest with the REITs’ respective financial advisors/bankers.
UPDATE 12/27/16: Coastal Realty Business Trust, an affiliate of MacKenzie Capital Management LP, is offering to purchase up to 1 million shares of Retail Centers of America common stock for $5.50 per share. The offer expires on January 24, 2017. Shares of Retail Centers of America originally sold for $10.00 each so this offer would result in an almost 50% decline in value its investors.
UPDATE 12/19/16: Retail Centers of America and American Finance Trust have postponed their respective special stockholder meetings to February 13, 2017 from January 25, 2017 during which shareholders will vote on the proposed merger that was announced in September.
What are Real Estate Investment Trusts (REIT)?
A Real Estate Investment Trust (“REIT”) is a complex investment that is generally only suitable for sophisticated high-net worth investors, and then only in certain circumstances. A REIT is an entity that owns, and may also manage, income producing real estate. REITs pool capital from multiple investors and use it to purchase properties, similar to mutual funds and other pooled investment vehicles.
A Real Estate Investment Trust can be offered in several different forms. A Public Exchange Listed REIT is registered with the U.S. Securities and Exchange Commission (“SEC”) and is publicly traded on a national securities exchange. A Public Non-Listed REIT is registered with the SEC, but does not trade on a major securities exchange. Finally, a Private REIT, also known as a private-placement REIT, is not registered with the SEC and does not trade on a national securities exchange.
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
American Realty Capital Retail Centers of America Due Diligence Requirement
FINRA requires brokerage firms to conduct due diligence on investments, such as American Realty Capital Retail Centers of America, 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 American Realty Capital Retail Centers of America, or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
Request a Free Consultation with a Securities Attorney
If you suffered losses investing in American Realty Capital Retail Centers of America and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
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.
