Girard Gibbs is investigating Wells Timberland REIT, Inc. (“Wells Timberland”) and its officers and directors for possible violations of state and federal securities laws. Wells Timberland investors who wish to learn more about the investigation, and persons with information relating to the investigation, should contact Girard Gibbs securities fraud attorney Jonathan K. Levine toll free at (866) 981-4800.
Wells Timberland is a real estate investment trust (commonly referred to as a “REIT”) that purchased timberland in Georgia and Alabama. Between May 2007 and December 2011, Wells Timberland sold common stock at $10.00 per share in an initial public offering and follow-on secondary offering. In connection with the initial public offering, Wells Timberland indicated that it intended to qualify as a REIT by the tax year ended 2006. In fact, Wells Timberland did not qualify as a REIT until the tax year ended 2009. Furthermore, according to FINRA, “The majority of the advertisements and sales literature failed to disclose the significance of Wells Timberland's non-REIT status or suggested that Wells Timberland was a REIT at a time when in fact it had not qualified as a REIT. The communications also contained misleading statements regarding Wells Timberland's portfolio diversification and ability to make distributions and redemptions.”
On December 14, 2012, Wells Timberland's board of directors announced a devaluation of the common stock from the $10.00 per share offering price to an estimated value of just $6.56 per share. The board's announcement attributed the devaluation, in part, to the economic downturn “experienced over the last four years” and carrying costs associated with the company’s debt capital. Girard Gibbs is investigating whether the supposed factors leading to the devaluation were known or should have been known to Wells Timberland and its officers and directors when the company was selling common stock to the investing public at $10.00 per share.