NEW YORK, May 1, 2012 (GLOBE NEWSWIRE) -- The Securities Arbitration Law Firm of Klayman & Toskes ("K&T"), www.nasd-law.com announced today that it is investigating securities arbitration claims against full-service brokerage firms who sold KBS Real Estate Investment Trust I ("KBS REIT"). Last month, KBS REIT investors were advised that the value of their investment was being cut from $7.32 per share to $5.16 per share. This represents a decline of 29% since the last time the value of the REIT's shares were cut, and decline of about 50% since the REIT was originally offered at $10 per share. As a result of the reduction in share price, investors have sustained significant economic damages. K&T is presently handling claims on behalf of KBS investors, and anticipates filing additional arbitration claims to recover losses sustained in the REIT.
KBS REIT is a non-traded, illiquid investment, and accordingly it was not suitable for all investors. Under Rules established by the Financial Industry Regulatory Authority ("FINRA"), brokerage firms have an obligation to make only suitable recommendations and to fully disclose all risks associated with a recommended product, including the fact that REITs are illiquid products. In some instances, brokers placed a significant amount of their client's assets in KBS, creating an unsuitable concentration in a single product. Moreover, brokerage firms have a duty to conduct a reasonable investigation of the issuer and the securities they recommend before approving them for sale to their customers.
In October of 2011, FINRA issued a new Investor Alert called Public Non-Traded REITs-Perform a Careful Review Before Investing to help investors understand the benefits, risks, features and fees of these investments. While investors may find non-traded REITs appealing due to the potential opportunity for capital appreciation and the allure of a robust distribution, investors should also realize that the periodic distributions that help make non-traded REITs so appealing can, in some cases, be heavily subsidized by borrowed funds and include a return of investor principal. Additionally, early redemption of shares is often very limited, and fees associated with the sale of these products can be high and erode total return.
Investors who purchased KBS REIT can contact K&T to explore their legal rights and options. The attorneys at K&T are dedicated to pursuing claims on behalf of investors who have suffered significant losses. K&T, an experienced, qualified and nationally recognized securities litigation law firm, practices exclusively in the field of securities arbitration and litigation. It continues its representation of investors throughout the world in securities arbitration and litigation matters against major Wall Street brokerage firms.
If you are an investor of KBS REIT, please contact Steven D. Toskes, Esquire or Jahan K. Manasseh, Esquire of Klayman & Toskes, P.A., at 888-997-9956 or visit us on the web at www.nasd-law.com