Did you suffer losses in an EquiAlt, LLC investment?
Galvin Legal is launching an investigation on behalf of investors who suffered losses investing in private placements offered by EquiAlt, LLC at the recommendation of their financial advisor. If you suffered losses investing in a EquiAlt, LLC private placement, then Galvin Legal may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim against the brokerage firm that recommended the investment.
Understanding the Investment: EquiAlt, LLC
EquiAlt, LLC purports to be a private real estate company with at least four private placements offerings: EquiAlt Fund, LLC; EquiAlt Fund II, LLC; EquiAlt Fund III, LLC; EquiAlt Secured Income Portfolio REIT, Inc.; EquiAlt Qualified Opportunity Zone Fund, LP; and EA Sip, LLC.
On February 18, 2020, the Securities and Exchange Commission (SEC) filed an emergency enforcement action and sought to obtain a temporary restraining order along with an asset freeze against EquiAlt LLC, its CEO Brian Davison, and its Managing Director Barry Rybicki. The SEC alleged that the action was being made in connection with EquiAlt’s alleged fraudulent unregistered securities offering that raised more than $170 million from at least 1,100 investors.
According to the SEC’s complaint, in the U.S. District Court for the Middle District of Florida, EquiAlt, Davison, Rybicki, and the other entities involved in the claimed fraud, raised millions of dollars by making material misrepresentations and false claims to investors about EquiAlt’s investment strategy. The SEC claims that the EquiAlt told investors they would pool investor funds and use approximately 90% of the money to purchase under-valued real estate, rent or flip the properties, and pay investors 8-10% annual interest generated from the real estate investments. However, as in the case with so many frauds, the SEC is claiming that a large portion of investor money went to support Davison’s and Rybicki’s lavish personal spending and that in fact less than 50% of the funds raised were used to invest in properties and other legitimate purposes. The SEC is claiming that money from one investment fund controlled by EquiAlt was allegedly used to make Ponzi-like payments to investors in another fund. Such commingling of funds amongst supposedly separate entities is common in Ponzi-schemes.
A federal judge has granted the SEC’s request for emergency relief and obtaining a temporary restraining order and an asset freeze. The court also granted the SEC’s request to appoint a receiver, whose job it is to marshal assets on behalf of defrauded investors. However, in many cases of fraud the receive only obtains a very small amount of funds to return to investors in relation to the size of the fraud.
EquiAlt, LLC Offerings
Your Brokerage Firm May Be Liable for Unsuitable Investment Guidance
FINRA requires brokerage firms to conduct due diligence on investments and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. One of the most important securities regulations is FINRA Rule 2111. Under this rule, often referred to simply as the suitability rule, financial advisors and broker-dealers must only recommend and sell securities that are reasonably appropriate for the investment experience, needs, and objectives of each individual client. Brokerage firms that fail to conduct adequate due diligence or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
Filing a FINRA Arbitration Claim
If your broker or brokerage firm recommended or offered EquiAlt, LLC investments, and you suffered significant investment losses as a result, you may be eligible to recover compensation through a FINRA arbitration claim. In most cases, investors are required to sign customer agreements that mandate arbitration as the exclusive legal remedy.
Our securities fraud lawyers have a deep understanding of the FINRA arbitration process. To initiate arbitration — no matter what state you live in — you must prepare and submit a Statement of Claim. While this is merely the first step in the claims process, it is imperative that you get this step right. Your Statement of Claim should be comprehensive: it should contain the allegations you are raising, the dates the violation occurred, the specific cause of action, a basic accounting of the evidence, and the damages being requested.
What Our Investor Losses Lawyers Can Do For You
At Galvin Legal, PLLC, we offer free, fully confidential case evaluation to investors nationwide. If you sustained serious investment losses in EquiAlt, LLC investments or any other private placement, we are prepared to help. Our legal team will start by carefully reviewing the facts and strength of your claim.
We will vigorously investigate your case and help you understand and assess all of your available options. Our securities fraud lawyer knows how to hold negligent investment advisors and investment advisory firms liable for their misconduct and we will fight tirelessly to protect your rights.
Request a Free Consultation with a Securities Attorney
This information is all publicly available and is being provided to you by Galvin Legal, PLLC.
Galvin Legal, PLLC is a national securities arbitration, securities mediation, securities litigation, securities fraud, securities regulation and compliance, and investor protection law practice. For more information on Galvin Legal, PLLC and its representation of investors, please visit www.galvinlegal.com or call 1-800-405-5117.