SmartStop Self Storage REIT Suspends Share Redemption Program | Goodman & Nekvasil P.A. May Recover Investor Losses
Goodman and Nekvasil is investigating potential claims involving FINRA registered brokerage firms who may have unsuitably recommended SmartStop Self Storage REIT.
According to the recent SEC Form 8-K:
According to an 8-K filing with the SEC last week, the board of directors of SmartStop Self Storage REIT suspended its share redemption program (SRP). It has also suspended its distribution reinvestment plan (DRP).
The company notes in the filing that distributions for the month of March, payable on April 15, 2022, will be payable in cash and that redemption requests made for the quarter ended March 31, 2022 will not be honored.
Prior to March 7, 2022, the SRP had been partially suspended, except for repurchases sought in connection with a stockholder’s death, qualifying disability, confinement to a long-term care facility or other exigent circumstances. This Current Report on Form 8-K serves as the 10-day notice for suspension of the DRP.
SmartStop Self Storage REIT Disclosed Risk Factors in SEC Form 10-K Annual Report
SmartStop Self Storage REIT paid, and may continue to pay, distributions from sources other than cash flow from operations; therefore, the company will have fewer funds available for the acquisition of properties, and stockholders’ overall return may be reduced.
There is currently no public trading market for company shares and there may never be one; therefore, it will be difficult for stockholders to sell their shares. The company charter does not require the pursuit of a liquidity transaction at any time.
The share redemption program is currently suspended, and even if stockholders are able to have their shares redeemed, stockholders may not be able to recover the amount of their investment in company shares.
SmartStop Self Storage REIT, Inc. issued Series A Convertible Preferred Stock that ranks senior to all common stock and grants the holder superior rights compared to common stockholders, which may have the effect of diluting stockholders’ interests in the company and discouraging a takeover or other similar transaction.
Estimated value per share for company shares may only be provided annually and, therefore, stockholders may not be able to determine the estimated net asset value of their shares on an ongoing basis.
Future results may suffer as a result of the effect of recent affiliated mergers, acquisitions and other strategic transactions.
Certain of our officers and key personnel will face competing demands relating to their time and will face conflicts of interest related to the positions they hold with affiliated entities, which could cause business to suffer.
Brokerage Firms Have An Obligation To Perform Reasonable Due Diligence and Determine Suitability
Brokerage firms who sold SmartStop Self Storage REIT needed to perform reasonable due diligence into the fund to determine whether it is suitable for any of its investors. The firm needed to perform a customer-specific suitability analysis, such as reviewing the client’s investment objectives, risk tolerance, income, net worth, and investment portfolio, to determine whether the investment was suitable for each client. Due diligence must be performed before recommending the investment to any clients.
Unfortunately, many firms make broad recommendations to its clients to earn large commissions.
SmartStop Self Storage REIT Investors May Recover Losses with Goodman & Nekvasil, P.A.
If you invested in SmartStop Self Storage REIT, Inc., Goodman & Nekvasil, P.A. may be able to help you. Goodman & Nekvasil, P.A., a St. Petersburg, FL law firm with a national practice representing victimized investors, has recovered more than $250 million dollars on behalf of victimized investors.
All our cases are handled on a purely contingency fee basis by Kalju Nekvasil, Esq., formerly regional counsel with the NASD, now known as FINRA. Kalju Nekvasil, Esq. has practiced in this area of the law for almost 40 years.
There is no charge for an evaluation of your case. Further, we handle our cases on a contingency fee basis. This means that unless we recover money for you, we charge no attorney’s fee. Unless you recover any money, you pay us nothing, not even the costs and expenses which the firm will advance on your behalf.
If you incurred investment losses in SmartStop Self Storage REIT and would like your case evaluated by a securities attorney (again, there is no charge for an evaluation and all cases are handled on a purely contingency fee basis), please contact us.
Some of the information in this blog post was obtained on 3/24/22 directly from the SEC without any changes. If you believe this information was reported incorrectly, please contact our firm at 1-800-500-4442.