Hospitality Investors Trust (HIT) filed for bankruptcy in May 2021. This real estate investment trust was previously known American Realty Capital (ARC).
HIT has been known to be a troubled investment for years. Securities brokers who have recommended HIT may have legal exposure. HIT paid excessively high commissions and, in turn, brokers turned a blind eye to the problems of HIT.
Securities brokers have a duty to only recommend suitable investments. This is mandated by FINRA Rule 2111. Part of this suitability requirement is to reasonably investigate all recommended investments. HIT should have only been sold to the most aggressive investors, assuming that it was suitable for any investors at all. Our experience is that HIT was inappropriately sold to many conservative to moderate investors and to investors relying on stable income from their investments to fund retirement.
The REIT, formerly headed by the famous, and somewhat infamous, Nicholas Schorsch, is no stranger to trouble. This former ARC REIT was previously part of an accounting scandal. In 2015, it was sued by many institutional investors under allegations that it misrepresented its business and artificially inflated prices.
If you believe you were inappropriately sold HIT please call 303-300-5022 for a free and confidential consultation. Jeffrey Pederson has been representing investors nationwide for over 19 years.