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LOS ANGELES, July 30, 2019 (GLOBE NEWSWIRE) -- Lawyers with Shepherd, Smith, Edwards, & Kantas (“SSEK Law Firm) recently filed a claim on behalf of clients alleging that Cetera Investment Services, LLC (“Cetera”) and its financial advisor Smansa Chu (“Chu”) over-concentrated the clients’ accounts in alternative investment private placements, such as Hospitality Investors Trust and Arc Hospitality Trust, as well as non-public Real Estate Investment Trusts (REITs). Chu operated out of an East West Bank Branch. While Cetera and East West Bank are separate companies, in 2013, Cetera and East West Bank signed a partnership agreement allowing Cetera to “provide comprehensive wealth management solutions and support across its six-state branch network” to East West Bank clients.
A private placement is an unregistered security offered to a limited pool of investors. Investors in private placements have to be “accredited”, meaning certain income and/or high net worth requirements set by the SEC must be met in addition to a verification process, in order to be allowed to invest. REITs are similar to private placements as they are an untraded and unregistered product. Private placements and similar untraded investments are largely illiquid and can be extremely risky. These entities are usually start-ups with a limited track record, which is why they cannot enter the public market for securities. Furthermore, there are limited disclosures regarding the internal finances of private placement and REITs, and no publicly available indication of the value. Values are based on an “independent” appraisal by a third party, if any, or based on the representations from the company itself as the investments are not public. These investments also usually pay high commissions to the advisors selling them.
If you are or were a client of Cetera, Smansa Chu, or any other advisor working with Cetera and believe you may have been inappropriately invested or otherwise lost money with them, contact SSEK Law Firm for a free, no obligation evaluation of your account. All communications will be kept strictly confidential. We have a team of attorneys, consultants and staff with more than 100 years of combined experience in the securities industry and in securities law. For more than two decades, our firm has represented thousands of investors nationwide to recover losses.
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