Harbor Custom Development, Inc.

Kurta Law is investigating brokers who recommended that their clients purchase shares of Harbor Custom Development, Inc. This investment came with substantial risks that made it unsuitable for many investors. These risks appear in the prospectus, the SEC filing that companies use to disclose their business strategy and related risks prior to offering the securities for sale. Unsuitable investments violate FINRA Rule 2111 and Regulation Best Interest, and investors who incur losses may be able to recover via FINRA arbitration.

If your broker recommended that you invest in Harbor Custom Development, you may have a claim against the firm through FINRA arbitration.  FINRA arbitration offers a quicker and cheaper remedy for investors than suing in civil court. Contact (877) 600-0098 or email info@kurtalawfirm.com to speak to a securities attorney for free today.

What is Harbor Custom Development?

According to its website, Harbor Custom Development, Inc. is a real estate development company involved in all aspects of the land development cycle including land acquisition, entitlements, construction of project infrastructure, home and apartment building, marketing, and sales of various residential projects in Washington, California, Texas, and Florida.

Investors should also know that Harbor Custom Development is registered as an emerging growth company, meaning that it can make limited disclosures in its prospectus. Less information generally means more risk.

Harbor Custom Development Stock

Harbor Custom Development, Inc. (HCDIQ) investments involve a high degree of risk, according to the company’s prospectus. The company debuted at $25.00 per share and recently traded at $0.23 per share. This massive drop in value was not surprising given the risks disclosed in the company’s prospectus.

Risks Associated with Harbor Custom Development Stock

Brokerage firms that approve an investment are required to understand the risks associated with an investment. Furthermore, brokers must accurately represent the risks associated with certain investments.

At the time of the prospectus filing, there were several risks related to Harbor Custom Development’s business. Difficulty in obtaining sufficient capital could result in an inability to acquire land for development, increased costs, and delays. The company’s operating performance is subject to risks associated with the real estate and homebuilding industry.  Other risks included the company’s geographic concentration, compliance with government regulations, exposure to liability, competition in the real estate development industry, supply chain issues, etc. Additionally, the prospectus indicates that there are risks relating to conflicts of interest.

ThinkEquity Underwriter

ThinkEquity served as the underwriter of Harbor Custom Development, Inc. Investors should know about this broker’s potential conflicts of interest. An underwriter should keep potentially overly risky investments from trading on the public stock market. But because underwriters make money by bringing new stocks to market, they may have a motivation to overlook certain risks.

What Can I Do If I Suffered Losses?

If you lose money due to your investment in Harbor Custom Development, consider reaching out to a Kurta Law securities attorney. Our securities attorneys have 5-star reviews on Google and a proven track record when it comes to securing fair settlements for our clients. Call (877) 600-0098 or email info@kurtalawfirm.com.