If you believe you have suffered losses in the DiversyFund Growth REIT I or Growth REIT II, you may be able to pursue recovery of your losses through securities arbitration or litigation. Please call Kons Law Firm at (860) 920-5181 for a FREE, NO OBLIGATION consultation to discuss your investment loss recovery options.
DiversyFund Growth REIT I and Growth REIT II Investors May Be Able to Pursue Recovery of their Losses
According to the SEC website, on March 16, 2022, the Securities and Exchange Commission announced that it temporarily suspended the registration exemption of San Diego-based DF Growth REIT II, LLC in connection with DiversyFund REIT II’s January 2021 $50 million securities offering under Regulation A and its amendments. According to the SEC, it temporarily suspended this Regulation A exemption on the grounds that if the Commission has reason to believe, among other things, that the issuer has failed to comply with Regulation A’s terms, conditions or requirements or that the issuer’s offering statement or sales materials contain untrue or misleading statements of material fact, it has the authority o issue a temporary suspension order.
According to the SEC’s temporary suspension order, DiversyFund REIT II filed an offering statement and an amended offering statement with the SEC to obtain a Regulation A exemption for a Tier 2 $50 million offering. The amended offering statement was qualified on January 29, 2021. As explained in the order, the Commission has reason to believe that REIT II failed to comply with certain Regulation A terms, conditions or requirements. Specifically, as stated in the order, there is reason to believe that REIT II failed to commence its qualified continuous offerings within two days after its January 29 qualification, as required by Rule 251(d)(3)(i)(F) under Regulation A. In addition, the order explains that there is reason to believe that REIT II raised its maximum offering amount from $50 million to $75 million through filing an offering circular supplement rather than a new offering statement or post-qualification amendment as required by the note to Rule 253(b) under Regulation A. According to the SEC’s order, the Commission also has reason to believe that REIT II’s offering documents and the website used to solicit REIT II investors made materially misleading representations regarding REIT II being a separate investment vehicle from REIT I, and regarding how much capital REIT II needs to raise from investors, its plan of operation based on the amount of capital raised, and its fees.
In a court filing in February 2022 prior to the SEC order, DiversyFund stated that there are over 30,000 investors in DiversyFund, and if the disqualification is sustained, they may suffer irreparable economic damage, including a loss of millions of dollars, as a direct and unavoidable consequence of the damage to DiversyFund ‘s reputation and ability to access capital markets.
Call for a Free Consultation to Discuss Your Legal Options Regarding DiversyFund
Fortunately for investors, they may be able to pursue recovery of losses that they may have suffered (or may suffer) in the DiversyFund Growth REIT I or DiversyFund Growth REIT II through securities arbitration or securities litigation. Please call Kons Law Firm at (860) 920-5181 for a FREE, NO OBLIGATION consultation to discuss your legal options.
Kons Law Firm represents investors nationwide in securities arbitration and litigation matters. To learn more about the Firm’s securities litigation and arbitration practice, please visit www.investmentlossattorney.com.