INVESTOR DEFENSE LAW BLOG

Posts in Category: “Aequitas Income Protection Fund”



Six Month Update On Aequitas Lawsuit: Why Aequitas Investors Need to Seriously Consider Suing their Financial Advisor

Posted on Sep 7th, 2016

The US Securities & Exchange Commission filed its lawsuit against Aequitas about six months ago, so now seems to be a good time to evaluate what we know about the Aequitas lawsuit, the receivership, and, most importantly, how investors will recover their investment losses.

A.      There is still so much we don’t know about the receivership’s finances, but none of the information we do have is good news for investors.

As investors who have read our prior articles will recall, the SEC sought and eventually received a court order establishing a receivership to manage the orderly sale of Aequitas assets, maximizing recovery for investors.


SEC Lawsuit against Aequitas is both Good News and Bad News for Investors

Posted on Mar 19th, 2016

Aequitas Lawsuit Offers Clues to What Caused Investment Losses: Should Financial Advisors Have Foreseen the Aequitas Implosion in 2012?

Late to the party, the U.S. Securities & Exchange Commission finally filed suit against Aequitas on March 10, 2016.

The SEC complaint provides a fascinating—albeit incomplete—perspective on Aequitas.

According to the SEC, at least as early as 2014, Aequitas became “a scheme to defraud and misuse client assets.” Aequitas claimed it was taking investor money to make investments, but was really using the money to make Ponzi-like payments to exiting investors, and to fund the private jet and other lavish corporate benefits and salaries Aequitas employees enjoyed.


Aequitas Lawsuit Offers Clues to What Caused Investment Losses: Should Financial Advisors Have Foreseen the Aequitas Implosion in 2012?

Posted on Mar 10th, 2016

Due diligence. It’s what financial advisors should do before they recommend an investment to their clients, and it’s what they should keep doing when their clients have millions of dollars in alternative assets, like the promissory notes issued by Aequitas Capital. (To read an earlier post summarizes events at Aequitas, click here.)

Shockingly, good due diligence might have raised red flags about Aequitas as early as , but investment advisors kept right on recommending Aequitas to investors



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What does a Receivership Do? An Investor’s Guide to How Receivers Recover Investment Losses While (Hopefully) Avoiding Bankruptcy

Posted on Oct 4th, 2016

If you’re reading this article, there is a good chance you invested in or through an entity that is now in receivership, and you probably have a lot of questions! The purpose of this article is to give you a general overview of how receiverships work so you know what to expect. Every receivership is different, but every receivership goes through four overlapping stages: 1) stabilization; 2) investigation; 3) litigation; and 4) distribution.

These four stages all support the overarching goal of every receivership—the orderly winding down of a business in a manner that maximizes value for investors.

We will come back to these four stages in a minute, but first it is important to understand the background context that gives rise to a receivership.


Three Signs You Should Sue Your Financial Advisor For Negligence Or Malpractice

Posted on Dec 24th, 2015

Some investor claims are easy to see, such as when money is simply missing from an account or a financial advisor has been arrested for securities fraud. In other cases, a financial advisor has been negligent. The financial advisor did not commit fraud, but he did make mistakes that caused investment losses. These cases are more difficult for an investor to spot. Here are the three things we see in most of the investor claims we file against financial advisors for malpractice or negligence.


The One Reason Why Variable Annuities Are Almost Always A Bad Idea

Posted on Jun 23rd, 2015

Financial advisors love to sell variable annuities. The reason is simple—commissions of up to 8%. If a financial advisor can sell you a $200,000 variable annuity, that means commissions of up to $16,000. Not bad for a day’s work!

Unfortunately, commissions are just about the only thing that is simple about variable annuities.

The one reason why variable annuities are almost always a bad idea is that they are too complicated for ordinary investors (and normal people in general) to understand. Seriously, have you ever tried to read a variable annuity policy? Here is just one example from an actual policy. Try to stay awake through this, because there is a lot more you urgently need to know about variable annuities:


Can I “Sue” My Financial Advisor?

Posted on May 6th, 2015

If your financial advisor has caused investment losses, you may want to sue your financial advisor. For better or for worse, you may instead be forced out of court and into a FINRA arbitration. This post explains why securities litigation frequently ends up in FINRA arbitration, and what you can expect from the FINRA arbitration process.


How to Report Investment Fraud

Posted on May 5th, 2015

Without an investment fraud lawyer, you can easily spend hour filing investment fraud reports with federal, state, and local agencies. While doing so is often a good idea, the payout can be low.


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