October 20, 2026 — Naples, FL. Vernon Litigation Group, based in Naples, Florida, is investigating claims on behalf of investors who have suffered significant CMCT investment losses involving Creative Media & Community Trust Corp.
In March 2026, CMCT completed a major redemption of its non-traded preferred shares, issuing common shares in lieu of cash to reduce its preferred dividend obligations and restructure its balance sheet. CMCT redeemed over $9 million in preferred shares by issuing over 250 million common shares (pre-split). When shares of common stock sunk, CMCT issued two 1-for-10 reverse stock splits in an effort to raise the share price. By summer 2026, shares fell over 90%.
Investments such as CMCT carry high risk and should generally only be recommended or sold to the most sophisticated and aggressive retail investors.
FINRA Regulatory Obligations for Non-Conventional Investments and REITs
FINRA routinely reminds its broker-dealer firms and financial representatives of their legal obligations regarding Non-Conventional Investments, such as REITs and other alternative products.
Specifically, firms must:
- Conduct adequate due diligence to understand the features and risks of the product.
- Perform a reasonable-basis suitability analysis.
- Perform a customer-specific suitability analysis in connection with any recommended transactions.
- Provide a balanced disclosure of both the risks and rewards associated with the particular product, especially when selling to retail investors.
- Implement appropriate internal controls and supervision.
- Adequately train registered persons regarding the features, risks, and suitability of these products.
If you believe your broker or advisor failed to fulfill these obligations, speaking with an experienced securities litigation attorney can help you understand your legal options for recovery.
Consult a Securities Attorney to Recover CMCT Losses
If you have suffered unnecessary CMCT losses due to broker misrepresentation or unsuitability, please contact us online today. One of our securities attorneys will happily provide you with a free overview of any potential claims you may have regarding unsuitable recommendations in alternative investments such as REITs.
For more information, visit our website at Vernon Litigation Group or contact Vernon Litigation Group by phone at (239) 319-4434 or by e-mail at info@vernonlitigation.com to speak with a representative in our Naples, FL office.