Unsuitable investments in Inland American Real Estate Trust and the Inland Western Retail Real Estate Trust have become a growing source of concern for more investors these days. In many cases, sales of Inland REITs were appropriate from the start for some investors. Why? Because the broker/dealers behind the deals failed to disclose all of the necessary information associated with the products, including the high commissions that the REITs commanded. In some instances, those fees exceeded 15%.
The Inland REITs are considered unlisted REITs; they do not trade on national stock exchanges. Redemptions in unlisted REITs are limited and almost always have a minimum holding period. If investors want to exit an unlisted REIT entirely, they usually can only do so at specified times.
Perhaps the biggest criticism of unlisted REITs has to do with their lack of transparency. Unlisted REITs also typically come with no independent source of performance data. Moreover, critics of unlisted REITs cite the often vague prospectus language regarding their formal exit strategies.
In recent months, we’ve heard from several investors who say their broker/dealer never discussed the various risks that investors take on when they purchase shares of an unlisted REIT. In reviewing these complaints, we’ve also discovered that some investors were kept in the dark about the fact that their investment in an unlisted REIT could literally be tied up for an undetermined amount of time in the event the REIT suspends its share-repurchase program.
That’s exactly what happened with Inland American, which suspended its buyback program in March 2009. Investors had two options: Hold onto their shares until buybacks become re-instated or attempt to sell their share, at a significant loss, on the secondary market.
If you believe your broker/dealer failed to provide adequate information concerning investments in the Inland American Real Estate Trust, the Inland Western Retail Real Estate Trust or another unlisted REIT, contact us.
March 5th, 2010 at 10:15 am
My husband, Thomas, and I were sold both the Inland American and Inland Western REIT by our Amerprise finanical advisor. We are certain that these REITS were offered to us because they were lucrative for the advisor. We stated that we were planning to retire in a few years. These investments were not appropriate to our needs. We want justice (and monetary damages) so that Ameriprise can pay. I am also aware of the SEC ruling of July 10, 2009 against Ameriprise for the Carey and CNL REITS. These were also sold to us by Ameriprise. We want these people to pay for lining their pockets and making us continue to work instead of enjoying our retirement.
Please contact me. We want to right the wrongs perpetrated by Ameriprise.
March 30th, 2010 at 12:20 pm
My wife and I were also sold Inland Western REIT shares and were not advised of the risks which have resulted in devaluing of the investment with the addition of non-liquidity. I would like to join in any class action against Ameriprise and/or Inland.
April 23rd, 2010 at 11:59 am
My wife and I were also sold Inland Western REIT shares thru Ameriprise and were not advised of the risks which have resulted in devaluing of the investment with the addition of non-liquidity. I would like to join in any class action against Ameriprise and/or Inland.
April 29th, 2010 at 12:57 pm
I was sold Inland American REIT shares through Ameriprise and I do believe I was not thoroughly advised of the risks associated with the investment. I was told I could buy back in a couple of years and when a cash setback occurred was stunned to find out that the buyback program was suspended. My Ameriprise advisor had assured me only months before that everything was okay with Inland and that I had “no worries” if I needed to get money out. As a result of the suspended program I have already lost a significant amount of money from having to sell some of my shares on the secondary market because of my financial crisis. I would love to know if any thing can be done about this!
May 31st, 2010 at 7:28 pm
I purchased shares thru “Financial Solutions” and have the same problem as those above.
Contacted the main office and was assigned a case manager. The independent broker lied to the case manager and said he never told me “things
were ok with Inland Western” when I wanted to sell my shares and that I could sell them later even if the re-purchase program closed. The broker never warned me of any risk of devaluing of the investment with the addition of non-liquidity.
June 4th, 2010 at 8:21 pm
I purchased shares based on the recommendation of the advisor at my bank for my mother who is a senior living on social security and dividends from her savings. He suggested that it was a very solid and secure investment and not likely to lose value and that I would be able to liquidate it without penalty after 5 years or with a decreasing penalty up to that point. Now it is 4 years later and I find out I can’t sell my shares even at a penalty. I’m very upset. My mother is dependent on this money and I feel like I’ve been duped. This is indicative of a fraudulent system that takes advantage of hard-working people in order to benefit the wealthy few. Disgusting. I hope someone will put together a class-action lawsuit so that shareholders can recover their funds. At this point I’d be happy to cash it in at a 5 or 10% loss but that scenario doesn’t look plausible right now.
September 14th, 2010 at 5:50 pm
My problem is the same as #4 I have a shortage of money and when I wanted to take part of the principle out was told I could not. My adviser did not tell me this. I was told I could take any money out after 1 year. what to do?
September 14th, 2010 at 9:56 pm
My husband and I retired several years ago and was guided by our Financial Adviser to invest half our IRA Retirement funds in Inland American REITS. At the time it seemed a good investment as we thought we could buy back funds as needed. In late 2008 we no longer trusted Inland American and twice asked our Financial Adviser to pull our money and roll over to our bank as the money would be insured that way. Both times he assured me that he would let me know ahead of time if Inland American was in such a bad way that we would need to do that because he would be privy to that information before us and we would have plenty of time to recover most of our funds. Didn’t happen! We found out the bad news on the Internet in 2009 and called him about it but was too late to apply for our funds. This is a Black Hole Money Pit as it stands right now. If we lose these funds it would be devastating to us.
September 21st, 2010 at 2:15 pm
My issue may be unique, but here it is. In order to purchase these unlisted REITs, one must be an accredited investor. Meaning a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase. I barely qualified for this, and my advisor had to count my house as an asset in order for me to meet the threshold. Well under the new Dodd-Frank act, your primary residence can no longer be counted as an asset. I hope that in the near future there will be a lawsuit, and if anyone has heard of any please let us know.
October 9th, 2010 at 12:10 pm
Is there going to be a class action against AMERIPRISE for sell in the Inland Western REIT’s and not disclosing all the pitfalls?
October 15th, 2010 at 11:24 pm
On October 12, 2010, the Board of Directors (the “Board”) of Inland Western Retail Real Estate Trust, Inc. (the “Company”) increased the annual base salary for the following officers, effective January 1, 2011: Steven P. Grimes, Chief Executive Officer, President, Chief Financial Officer and Treasurer, to $525,000; Shane C. Garrison, Executive Vice President and Chief Investment Officer, to $350,000; Dennis K. Holland, Executive Vice President, General Counsel and Secretary, to $325,000; and Niall J. Byrne, Executive Vice President and President of Property Management to $275,000. Among other reasons, the Board made these adjustments as none of the management team, other than Mr. Grimes, has had an increase in base salary during the period from January 1, 2008 through January 1, 2011, the effective date of such adjustments, while undertaking increased workloads due to the recent economic recession and the reallocation of duties of the Company’s previous President and Chief Executive Officer, who left in 2009. In addition, the Board made these adjustments at this time in view of the fact that the adjustments to the management team’s base salaries aggregated $260,000, which is less than the $375,000 in executive compensation savings achieved by the combining of the role of the Chief Financial Officer with the Chief Executive Officer. The Board has also amended the bonus arrangement for the management team, among others, to provide that bonuses, if any, will be made in shares of common stock of the Company rather than cash, if certain goals are achieved.
October 20th, 2010 at 2:23 pm
I am on the line with Iland right now with my husband. We checked online – they devalued my REIT!? How is that possible. My broker NEVER discussed that possibility. I’m down $4000!!! This crazy, considering they, Inland, keeps sending me statements telling me how great they are doing. Something is shady. I want my money back and it doesn’t look possible. Our broker should never have suggested this to us. We should never have bought in. If someone starts a lawsuit I’m in.
October 25th, 2010 at 5:32 pm
Oh…all these stories sound the same as ours! Our Ameriprise mgr thought Inland American was perfect for us in 2007 as my husband rolled his 401K to Ameriprise. He NEVER addressed the fact that there’s no getting out, and from what I’ve read, it may take generations to be able to collect any monies. Fast forward, October 2010, shares are now reduced fro $10 to $8.03 a share! We lost all the reinvested dividends we made over the last years, plus add’l money that was part of the initial investment. I agree with some of the other posters that Ameriprise is in bed with Inland and rec’d a hefty commission. Class action? I say we all need to go for it!!!!
November 3rd, 2010 at 4:53 pm
I also have share I can get rid of without a substantial loss. My ex-broker advised me this was a good investment as well.
If anyone wants to organize a class action suit against Inland I’M IN!!!
November 6th, 2010 at 7:41 am
I was offered this reit from inland western, not being advised of the fact that I would now not be able to redeem or sell back the shares, so basically worthless, this was an example of a very safe investment??was not advised by broker that the shares could not be sold back, until I called inland western. Never advised about risks. I have called and told that the broker had some as well, perhaps he would like to purchase mine. I doubt it. Have suffered a loss. Think they were pushing a bill of goods, I think they were in bed with as well
November 7th, 2010 at 1:29 pm
We have investments with inland american and western.Sone is a 401 I rolled into it.
I was not advised it would be what it is now or something I could not get my principle money out of.
Yes,if there is anyway to get all or most of our money back from these investments,I am interested.
November 24th, 2010 at 4:00 pm
My Ameriprise advisor also told me that Inland American was a great and conservative investment that had performed well for decades throughout previous recessions. When I called my advisor to see if I should take my money out (because I had my money in long enough that no penalties were attached) due to all the economic crises I had been hearing about, he told me to not worry about it, Inland was not affected and doing great! Two months later they issued the suspension. Of course, the advisor stated, “Well, it’s always a risk — I had no idea.” Since then I have lost much money (which was supposed to be for my child’s college funds) with no ability to recoup. If there’s a class action suit I’M IN TOO!
November 28th, 2010 at 5:15 pm
We were sold the SwampLand as well by Securities Financial Management. Never told of the risks or the fact that we can’t get our money. We are at risk of being evicted due to unemployment. We have maxed out our credit cards. Can’t apply for Federal Assistance bec we have investments. But these investments are worthless and I can’t even get out of them. I want in on any class action lawsuit. Meanwhile I am supposed to pay him annual fees. He gets his money but I can’t. He wants me to stop the reinvestment and put the puny dividends into a money market account to he can get his management fees. Please keep me informed if there is a class action!!!!