Nelson
Brothers 345 Flats DST investor losses under investigation
Haselkorn & Thibaut, P.A., operating as Investment Fraud Lawyers,
is investigating investor losses in the 345 Flats Delaware Statutory
Trust sponsored by Nelson Brothers. We are former Wall Street defense
attorneys who now use that insider knowledge to help investors recover
losses caused by unsuitable recommendations, incomplete due diligence,
and sponsor misconduct.
The 345 Flats
DST and what is under investigation
The 345 Flats DST is a Delaware Statutory Trust that holds a
multifamily residential property sponsored by Nelson Brothers. The
program was offered to investors as a 1031 exchange replacement
property, allowing them to defer capital gains taxes by exchanging into
a fractional interest in the trust.
Law firms are currently investigating the 345 Flats DST amid reports
that investors were allegedly misled about the risks and liquidity of
the investment. Because this matter is under investigation, specific
claims have not been finally adjudicated. The investigation focuses on
whether broker-dealers adequately disclosed the DST’s risks and whether
the investment was suitable for the investors who purchased it.
Key issues under
investigation
| Issue | What investors reported | Potential concern |
|---|---|---|
| Liquidity risk | Investors were unable to exit the investment when needed | DST interests have no public market and limited secondary market |
| Risk disclosures | Risk factors may have been understated or incompletely communicated |
Investors may not have understood the full risk profile |
| Projected returns | Distribution projections may have been optimistic | Actual performance may not match projections |
| Suitability | Investors who needed income or liquidity may have been placed in a long-hold DST |
The investment may not have fit the investor’s profile |
Why the 345 Flats
DST investigation matters
DST investors give up control over management, financing, and sale
decisions. The sponsor — in this case, Nelson Brothers — makes every
operational decision. When distributions fall below projections, or when
investors Discover that the risks were greater than they understood, the
question becomes whether the broker-dealer that recommended the DST
conducted adequate due diligence and provided suitable advice.
Nelson Brothers and DST
sponsorship
Nelson Brothers has sponsored multiple DST programs. Like all DST
sponsors, their programs are only as strong as the due diligence
performed by the broker-dealers who recommend them. Our investigation
focuses on whether:
- Broker-dealers independently verified the property’s financial
projections and local market conditions. - The fee structure was fully disclosed and reasonable.
- The DST’s illiquidity, holding period, and distribution risks were
communicated to investors. - The investment was suitable for each investor’s financial situation,
liquidity needs, and risk tolerance.
Broker-dealer due
diligence obligations
Broker-dealers that recommended the 345 Flats DST were required to
conduct reasonable due diligence under FINRA rules. Our investigation
has identified potential failures:
| FINRA requirement | What brokers should have done | What may have occurred instead |
|---|---|---|
| FINRA Rule 2111 (Suitability) | Evaluate whether the DST fit each investor’s profile | Investors who needed liquidity may have been placed in a long-hold, illiquid DST |
| FINRA Regulatory Notice 10-22 | Conduct independent investigation of the sponsor, property, and risks |
Brokers may have relied on sponsor-provided materials without independent verification |
| FINRA Regulatory Notice 05-18 | Provide balanced risk disclosure | Marketing may have overstated benefits while understating liquidity and distribution risk |
| FINRA Rule 2210 | Ensure fair and balanced communications | Sales materials may have been incomplete or misleading |
What 345 Flats DST
investors can do
If you invested in the 345 Flats DST and have experienced losses, you
may have claims against the broker-dealer that recommended the
investment. Potential claims include:
- Unsuitable recommendation: The DST did not fit your
investment profile, liquidity needs, or risk tolerance. - Misrepresentation: The broker made false statements
about the DST’s projected returns, distribution stability, or risk
profile. - Omission of material facts: The broker failed to
disclose important risks, including illiquidity, distribution
suspension, or sponsor dependence. - Failure to supervise: The broker-dealer did not
adequately supervise the registered representative who recommended the
DST.
Recovery options
| Forum | Typical defendants | Common claims |
|---|---|---|
| FINRA arbitration | Selling broker-dealer and registered representative | Unsuitable recommendation, misrepresentation, omission, failure to supervise |
| Civil litigation | DST sponsor, trustee, or affiliates | Fraud, breach of fiduciary duty, breach of offering documents |
DST
investor rights when a program is under investigation
When a DST program is under investigation, investors often feel
uncertain about their options. The investigation itself does not
guarantee recovery, but it can be a catalyst for action. Here are the
key rights and steps:
Right to information
DST investors have the right to receive periodic reports from the
sponsor about the property’s financial condition, occupancy, and
operating performance. If the sponsor is not providing adequate
information, investors can request written updates and should document
any failure to respond.
Right to consult counsel
Investors are not required to wait for the investigation to conclude
before consulting an attorney. In fact, statutes of limitations apply to
FINRA arbitration claims and civil litigation. Delaying action can
jeopardize the ability to recover.
Right to pursue
broker-dealer claims
Even when a DST program is under investigation, investors may have
separate claims against the broker-dealer that recommended the
investment. These claims are independent of any sponsor investigation
and focus on whether the recommendation was suitable, whether due
diligence was adequate, and whether material risks were disclosed.
Timeline considerations
| Action | When to take it | Why timing matters |
|---|---|---|
| Document review | Immediately | Preserve evidence before it is lost or altered |
| Sponsor information request | Within 30 days of distribution stoppage | Establishes a paper trail and forces transparency |
| Attorney consultation | As soon as possible | Statutes of limitations may bar claims if delayed |
| FINRA arbitration filing | Within the applicable statute of limitations | Most states impose a 2–6 year limitations period |
Contact Investment Fraud
Lawyers
Haselkorn & Thibaut, P.A., operating as Investment Fraud Lawyers,
has recovered losses for investors across the country. We work on a
contingency fee basis: no recovery, no fee. We review each case at no
cost and determine whether the broker, sponsor, or both may be
liable.
If you lost money in the Nelson Brothers 345 Flats DST, call us at
1-888-885-7162 or use our confidential contact form. We
will review your brokerage statements, offering documents, and
communications to identify whether your losses were avoidable.
Legal disclaimer: Past results do not guarantee
future outcomes. Every case is unique, and recovery depends on the
specific facts, applicable law, and available defendants.
Return to our main resource on DST investor losses.