Wells Timberland REIT Fraud Lawsuit: Losses?



Our law firm wants to speak to investors who lost money in Wells Timberland REIT

Investors with losses in the Wells Timberland REIT may have legal claims and avenues to recover lost funds. There are two basic issues:

1) Investors may have been misinformed to invest

2) Investors have lost money in their investment.

Overview:

The Financial Industry Regulatory Authority (FINRA) acted against Wells Investment Securities, the distributor of the non-traded REIT sponsor Wells Real Estate Funds. FINRA ruled that Wells, through its broker dealer arm, made 116 misrepresentations of fact regarding the sale of the Wells Timberland REIT.  Many of those misrepresentations were contained the offering documents to investors.

These Wells REIT shares, which are not publicly traded, where sold beginning in 2006 at $10 each. FINRA fined Wells $300,000, concluding that Wells used improper sales materials when selling the Wells Timberland REIT from May 2007 to September 2009. According to FINRA, these marketing materials contained 116 "improper, unwarranted or exaggerated statements." FINRA further concluded that information concerning the diversification, distributions and redemptions of the REIT were misleading.

"By approving and distributing marketing materials with ambiguous and equivocal statements, Wells misled investors into thinking Wells Timberland was a REIT at a time when it was not a REIT," - Brad Bennett, FINRA executive vice president and chief of enforcement.

According to the allegations, When Wells first began to sell the shares as REIT, it owned no land and thus could not be a REIT.  When Wells was able to declare itself a REIT but it purchased no other properties than a single piece it acquired.  During this time, Wells represented that it would have, or had, a diverse portfolio of real estate which would protect it from market down turns.

Wells Timberland’s investors have lost money. Since Dec. 2010, most investors not been able to redeem their shares. Wells Timberland stopped redemptions because of restrictions by its lenders protecting their loans to Wells. When Wells Timberland does allow redemptions, investors may lose about 40% of their investment. We estimate investors who purchased at $10 per share will be able to redeem for $6 per share: a 40% loss.

If you invested in Wells Timberland REIT please call Attorney Bill Kyros at 1-800-934-2921 to discuss your rights.

Kyros Law is a Boston-based law firm with significant experience representing investors in FINRA recoveries, REIT Litigation, shareholder lawsuits, class actions, shareholder derivative actions, and securities fraud class actions. For info about our law firm please our Kyros Law web site.