If you bought an EcoVest Capital syndicated conservation easement offering, you may now be dealing with an IRS audit or a disallowed deduction. A separate question is whether the broker who sold you the investment can be held responsible for the loss. Vernon Litigation Group has filed FINRA arbitration claims against broker-dealers on that theory, and the firm's investigation is now nationwide.
Vernon Litigation Group has now filed more than $5 million in FINRA arbitration claims on behalf of investors who were convinced to buy EcoVest Capital syndicated conservation easement offerings and similar high-commission, illiquid alternative investments marketed to retail investors. As indicated, the firm's nationwide investigation is based upon FINRA arbitration claims it has already filed for investors alleging improper sales practices and deficient broker-dealer due diligence in connection with alternative investments.
This nationwide push builds on claims the firm has already filed for individual investors, including EcoVest Capital claims involving United Planners broker Aaron Sevigny.
Case Update: Vernon Litigation Group Now Represents Approximately 8 EcoVest Capital Investors Nationwide
Vernon Litigation Group has now filed FINRA arbitration claims on behalf of approximately 8 investors who purchased EcoVest Capital offerings. Based on the firm's own case count, Vernon Litigation Group believes it is currently among the top 2 firms nationally by case volume handling EcoVest-related FINRA arbitration claims. A growing number of attorneys and firms across the country are now pursuing similar EcoVest-related cases, and the firm continues to accept new claims from affected investors. This describes claims filed, not amounts recovered, and past results do not guarantee a similar outcome in any future case.
Did the DOJ Settlement Get Any Money Back for Investors?
No. The Department of Justice sued EcoVest Capital and several co-defendants in December 2018, alleging the company organized and sold conservation easement syndicates that generated improper tax deductions. That case settled in March 2023 with a permanent injunction, a court order barring the defendants from selling or promoting syndicated conservation easement deals going forward. EcoVest did not admit to any of the allegations, and the settlement included no fines and no monetary payment.
For investors, that last detail is the one that matters. No money changed hands, so the settlement created no fund to draw from. Neither the DOJ case nor an IRS audit is a route to getting an investment loss back. The usual route is a FINRA arbitration claim against the broker-dealer that sold the investment.
Why Is EcoVest Capital Under Government Scrutiny?
EcoVest Capital offerings have been widely reported as drawing heightened government scrutiny and creating substantial tax exposure for certain investors. According to Vernon Litigation Group, some EcoVest Capital investors are now confronting audits, disallowed deductions, and additional liabilities, including potential penalties and interest, after being marketed as investments that were tax-advantaged and suitable.
FINRA's Long-Standing Warning on Non-Conventional Investments
Publicly available FINRA guidance, including FINRA Notice to Members 03-71, has long emphasized that alternative and other "non-conventional" investments present special sales-practice concerns, including investor misunderstanding of risks, illiquidity, valuation complexity, and conflicts associated with high compensation structures.
Documents to Gather Before a Case Evaluation
Vernon Litigation Group encourages investors who purchased EcoVest Capital offerings, or who believe they were sold other illiquid, high-commission alternative investments without a full understanding of risks, to gather and review these key documents:
- New account forms
- Risk-profile questionnaires
- Account statements
- Trade confirmations
- Private placement memoranda
- Subscription agreements
- Communications with their advisor
Contact the Firm for a Confidential Consultation
For more information about the nationwide investigation, or to discuss potential FINRA arbitration claims involving EcoVest Capital or other alternative investments, contact Vernon Litigation Group at (239) 319-4434 for a confidential consultation.
About Vernon Litigation Group
Vernon Litigation Group represents investors nationwide in securities disputes, including FINRA arbitration matters against broker-dealers and registered representatives. The firm's founding partner, Christopher Vernon, is AV Preeminent(R) Peer Review Rated by Martindale-Hubbell and has been recognized by Florida Super Lawyers and The Best Lawyers in America in categories that include securities and commercial litigation. The firm also notes that Mr. Vernon has experience providing testimony and litigation support on investment-related matters, including issues involving standards of care, suitability, due diligence, conflicts of interest, and alternative investments.
Frequently Asked Questions About EcoVest Capital FINRA Arbitration Claims
Can I sue my financial advisor or brokerage firm over an EcoVest Capital investment?
You can often bring a claim, though usually not a lawsuit in open court. Most brokerage account agreements require disputes to go through FINRA arbitration instead. The claim would target the broker-dealer that recommended and sold you the investment, not EcoVest Capital itself.
What is FINRA arbitration, and how is it different from filing a lawsuit in court?
FINRA arbitration is a private dispute resolution process for claims against brokers and brokerage firms. A panel of arbitrators, rather than a judge or jury, hears the evidence and issues a binding decision. It usually moves faster than a court case, and the hearing is not open to the public.
How long do I have to file a FINRA arbitration claim over an EcoVest investment?
Six years, as a general rule. FINRA's eligibility rule measures that window from the events giving rise to the dispute. Shorter state deadlines and other defenses can also apply, so it is worth having a case reviewed sooner rather than later.
What documents should I have ready before talking to a securities attorney?
Pull together the items in the checklist above, especially your account statements, trade confirmations, and any subscription agreement or private placement memorandum you received. Having these on hand speeds up an initial case evaluation.
What can I recover in a FINRA arbitration claim, and what does it cost to bring one?
Outcomes depend on the facts of each claim and aren't guaranteed. Many securities arbitration attorneys, including Vernon Litigation Group, handle these claims on a contingency basis, meaning there's no attorney's fee unless there's a recovery. Fee terms still vary from firm to firm.
If the IRS offers a settlement to conservation easement investors, should I take it, and does that affect my claim against my broker?
That's a tax question, and you should run it by a tax professional. It sits on a separate track from a FINRA arbitration claim against the broker-dealer who sold you the investment, and resolving one doesn't automatically resolve the other.