Real Estate Trusts Face Suit on Alleged SEC Exemption Claim (1)

DiversyFund, Inc., the sponsor of two real estate investment trusts, and its top executives must defend against claims they misguided shareholders on whether the trusts were exempt from Securities and Exchange Commission registration and its charging of asset management fees, a judge ordered.

Investors adequately alleged in their second amended complaint that the REITs misled and harmed them by indicating their offerings of DiversyFund Investor Shares were exempted from registration when that wasn’t true, said Judge Anthony J. Battaglia in the US District Court for the Southern District of California on Friday. REIT I offered these shares from 2018 ...