CAPFUNDR

Non-traded REITs have certainly seen their share of hard times recently. First, there was industry leader American Realty Capital going down in flames after getting investigated by the FBI and SEC for accounting fraud. Then in February the FBI raided United Development Funding after hedge fund manager Kyle Bass accused it of running a Ponzi scheme and shorted one of its listed REITs (other UDF REITs are non-listed). Now new SEC and DOL (Dept. of Labor) rules designed to protect investors are coming into effect, and they will make the distribution of non-traded REITs through traditional broker channels much more difficult.