Manhattan Bridge Capital REIT

Kurta Law is investigating broker recommendations of a Real Estate Investment Trust (REIT) called Manhattan Bridge Capital REIT (NASDAQ: LOAN). The Manhattan Bridge Capital REIT prospectus, the document that companies file with the Securities and Exchange Commission when registering stock offerings, clearly states that “Investing in our common shares involves a high degree of risk.”  

Brokers are required to exclusively recommend investments that suit their customers’ risk tolerances. Recommendations that fall outside of an investor’s risk tolerance may be deemed unsuitable and in violation of FINRA Rule 2111.  

If you believe your broker may have violated securities regulations when recommending shares or Manhattan Bridge Capital REIT, contact Kurta Law today. Call (877) 600-0098 or email info@kurtalawfirm.com.  

What is a REIT? 

REITs are companies that own a portfolio of income-producing real estate, such as multi-family rental properties or office space. REITs might also provide financing for income-producing real estate.  

The Offering  

The prospectus dated July 28, 2014, announced that Manhattan Bridge Capital REIT announced that it would conduct an offering of 1,754,386 shares for $2.85 per share.  

About Manhattan Bridge Capital REIT 

According to the prospectus, Manhattan Bridge Capital REIT specializes in originating, servicing, and managing a portfolio of first mortgage loans for real estate investors who fund the acquisition, renovation, rehabilitation, or improvement of properties located in the New York metropolitan area.  

Risks Associated with Manhattan Bridge Capital REIT Stocks 

Brokers should have clearly discussed the risks disclosed in the prospectus. The following are some risks that Kurta Law has chosen to highlight. Readers will find the complete list of risks on page 12 of the prospectus.  

No Operating History  

Manhattan Bridge Capital REIT had no history as a REIT at the time of the stock offering. Lack of experience may negatively affect the business. 

Competitive Market  

Because of the competitive real estate market, it may be difficult for Manhattan Bridge REIT to originate loans with favorable interest rates.  

Management Authority  

Management has broad authority over lending decisions. You may not agree with these decisions, and they may adversely affect the business.  

Potential for Losses  

If Manhattan Bridge REIT overestimates the yields or incorrectly values the collateral securing the loans, Manhattan Bridge REIT could experience losses.  

Short-Term Loans  

Short-term loans may come with a greater risk for losses than traditional mortgage loans.  

Concentration in the New York City Area  

The loans are concentrated in New York City, meaning that adverse changes in that real estate market may have negative consequences for this investment.  

Aegis Capital Corp. Underwriting    

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm. 

Kurta Law Can Help  

Contact Kurta Law today for a free case evaluation – keep in mind that you have a limited time to file a claim. Our attorneys do not collect a fee unless we win your case. Call (877) 600-0098 or email info@kurtalawfirm.com.