Alternative investments often arrive wrapped in polished language: income, diversification, access, downside protection, low correlation. But when a non-traded REIT, BDC, private placement, oil and gas program, or other illiquid product starts underperforming, many investors discover a second problem after the investment itself: recovery can take longer when early mistakes shape the record.
That timing issue matters. FINRA reported 1,643 customer arbitration filings in 2025, with an overall turnaround time of 13.4 months for cases closed that year, which gives some context for how long securities disputes can already take even before avoidable delays enter the picture (FINRA dispute statistics). In other words, a claim involving an illiquid product may already be on a serious timeline. Certain investor decisions — often made before the investor even realizes there may be a claim — can make the process slower, more expensive, or harder to document.
If you’re trying to understand the products themselves, this broader guide on illiquid investments and sales-practice risk gives useful background. In this post, you’ll learn eight common mistakes that can delay recovery in alternative-investment cases, why they matter, and what many attorneys look for when evaluating whether a case is ready to move.
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Alternative-investment disputes often involve facts that are harder to reconstruct than ordinary stock losses. Publicly traded securities usually come with visible pricing, liquid markets, and familiar trade records. Illiquid products often do not.
The SEC has warned that non-traded REITs can involve high upfront fees, limited liquidity, valuation uncertainty, and distributions that may come from offering proceeds or borrowings rather than operating income (Investor.gov bulletin on non-traded REITs). FINRA has likewise emphasized that products like unlisted REITs can present liquidity and valuation issues for retail investors (FINRA Regulatory Notice 12-03). And under FINRA Rule 2111, recommendations are evaluated in light of a customer’s age, liquidity needs, risk tolerance, investment objectives, time horizon, and other profile information.
That combination often turns these cases into record-heavy disputes about what was said, what was disclosed, what alternatives were available, how concentrated the account became, and whether the product fit the investor’s profile at the time of recommendation.
One of the most common delays starts with a simple assumption: “It’s down now, but maybe it will come back.” That instinct is understandable, especially when the product was presented as long-term, income-producing, or insulated from stock-market swings.