Naples Firm Vernon Litigation Group Handling Investigating Claims Involving iCap Equity Fund Bankruptcy
Vernon Litigation Group, based in Naples, Florida is investigating claims on behalf of investors sold iCap Equity mutual funds. iCap funds were sold through independent broker dealers as a safe way to generate income in a low interest rate environment. Investors were told that the income payments were safe and that the investment principal was secure. Of course, the brokers selling iCap received selling concessions of 7-10%. These incentives, which create major conflicts of interest, were not disclosed on the trade confirmations to investors. Brokerage firms should have known that 10% distributions, large commissions, and fund overhead would eventually cripple the iCap funds they were recommending to their clients. Not surprising, in March 2023, iCap announced that it was halting income payments to its investors due to significant changes in interest rates. Then, after layoffs and resignations, on September 29, 2023, iCap declared bankruptcy leaving investors with virtually worthless investments.
Alternative investments such as iCap Fund are non- conventional investments subject to the specifications of NASD Notice to Members 03-71. FINRA specifically reminded firms in NTM 03-71 that:
Given the complex nature of NCIs (Non-Conventional Investments aka Alternative Investments) and the potential for customer harm or confusion, members are cautioned to ensure that their sales conduct procedures fully and accurately address any of the special circumstances presented by the sale of NCIs. Additionally, NASD is concerned that investors, particularly retail investors, may not fully understand the risks associated with these products.
FINRA goes on to remind members offering Non-Conventional Investments such as private placements and other alternatives of their obligations to: (1) conduct adequate due diligence to understand the features of the product; (2) perform a reasonable-basis suitability analysis; (3) perform customer-specific suitability analysis in connection with any recommended transactions; (4) provide a balanced disclosure of both the risks and rewards associated with the particular product, especially when selling to retail investors; (5) implement appropriate internal controls; and (6) train registered persons regarding the features, risks, and suitability of these products.
The independent broker dealers selling iCap funds failed to meet the stringent requirements to sell such investments.
If you have suffered unnecessary losses due to recommendations to purchase any iCap Funds, please contact us. Vernon Litigation Group has decades of extensive experience pursuing claims relating for failed REITS nationwide. One of our securities attorneys will provide you with a free overview of any potential claims you may have regarding these speculative investment recommendations (over and above claims in bankruptcy). For more information, visit our website at http://www.vernonlitigation.com/ or contact Vernon Litigation Group by phone at 1-877-649-5394 or by e-mail at firstname.lastname@example.org to speak with a representative of Vernon Litigation Group.