Vernon Litigation Group has filed another FINRA arbitration claim 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. The filing is the latest step in the firm's nationwide investigation into syndicated conservation easement investor claims involving EcoVest Capital (see our recent update on that investigation). Our clients were sold more than $500,000 in EcoVest Capital deals. This describes a claim filed, not amounts recovered, and past results do not guarantee a similar outcome in any future case.
According to Vernon Litigation Group, a number of EcoVest Capital investors are now facing audits, denied deductions, and other liabilities, including possible penalties and interest, because the investments were marketed to them as tax-advantaged and suitable.
EcoVest Capital's conservation easement programs have already drawn direct federal action. The U.S. Department of Justice filed a civil lawsuit against the company in December 2018, and the case ended in March 2023 with a permanent consent injunction and no admission of wrongdoing. Separately, the IRS is now running a time-limited 2026 settlement program for conservation easement tax disputes generally, with firm deadlines for the taxpayers it covers. Both are explained below.
Why Does the 2026 IRS Conservation Easement Settlement Deadline Matter for EcoVest Capital Investors?
Because the window is short and already running. On May 13, 2026, the IRS announced a time-limited settlement opportunity for eligible taxpayers in conservation easement disputes, at a point when more than 1,100 such cases were pending (IRS IR-2026-65).
The IRS is issuing individualized settlement letters to eligible partnerships on a rolling basis. A partnership has 90 days from the date its letter issues to accept the initial terms. Those terms carry a 10 percent penalty for overstating the value of the donated easement, which the IRS calls a gross valuation misstatement penalty, and they require no payment at the time of election. A second 45-day window follows on generally the same terms, except that the penalty rises to 20 percent. That is 135 days in total, and the IRS says no extensions are available.
Cases that miss the full window lose those terms. The IRS says cases that settle after the window closes generally reflect only about 5 to 7 percent of the claimed deduction, plus a 40 percent penalty. Because the election is made at the partnership level, an individual investor's exposure generally follows from what the partnership does, which is why these dates matter even to investors who never receive a letter of their own.
The IRS has also stated that, across conservation easement cases as a whole, the Tax Court has on average allowed only 6 percent of the original claimed deduction and has generally imposed a 40 percent gross valuation misstatement penalty, plus interest. For an investor deciding whether to litigate instead of settle, that is the clearest public benchmark available.
This settlement track resolves a taxpayer's dispute with the IRS. It is a separate legal process from a FINRA arbitration claim against the broker-dealer or registered representative who recommended and sold the investment. Accepting or declining the IRS offer does not by itself resolve a securities claim.
Did the DOJ's EcoVest Capital Conservation Easement Lawsuit Get Investors Their Money Back?
No. The U.S. Department of Justice filed a civil complaint against EcoVest Capital, Inc. and several of its principals in December 2018, alleging that they organized and sold syndicated conservation easement deals that generated improper tax deductions (DOJ press release: https://www.justice.gov/archives/opa/pr/justice-department-sues-shut-down-promoters-conservation-easement-tax-scheme-operating-out).
EcoVest contested the case and denied the allegations. It settled in March 2023, when a federal court in Georgia entered a permanent consent injunction barring EcoVest and its principals from promoting or facilitating these transactions going forward. EcoVest did not admit any of the allegations, and the settlement included no fines and no payment of money.
Because no money changed hands, the settlement created no investor restitution fund. Investors remain individually responsible for resolving their own tax exposure with the IRS, separately from any FINRA arbitration claim against the broker-dealer who sold them the investment.
What Does FINRA Guidance Say About Selling EcoVest Capital Offerings and Similar Investments?
In 2003, NASD, the organization that became FINRA, cautioned that so-called “non-conventional investments” carry sales-practice risks that ordinary stock and bond transactions do not. Notice to Members 03-71 warns that investors, particularly retail investors, may not fully understand the risks of these products, and it directs member firms to weigh factors including a product's liquidity, whether a secondary market exists, its tax consequences, and its costs and fees before recommending it.
FINRA's more recent guidance on complex products, including Regulatory Notice 22-08, returns to those same themes and reminds firms of their obligations under Regulation Best Interest, the standard that bars a firm from placing its own interests ahead of a retail customer's when it makes a recommendation. Regulatory Notice 12-03, issued in January 2012, speaks directly to the fourth concern below: it calls for heightened supervisory and compliance procedures before a firm recommends complex products to retail investors, addressing the conflicts that can arise from high compensation structures. Together, this guidance speaks to the concerns Vernon Litigation Group raises about EcoVest Capital offerings and similar products: investor misunderstanding of risk, illiquidity, valuation complexity, and conflicts of interest tied to high compensation.
What Documents Should You Gather Before Talking to a Securities Attorney?
Before a case evaluation, Vernon Litigation Group asks investors who bought EcoVest Capital offerings, or who suspect they were sold other high-commission, illiquid alternative investments without fully grasping the risks, to locate and bring the following records:
- New account forms
- Risk-profile questionnaires
- Account statements
- Trade confirmations
- Private placement memoranda
- Subscription agreements
- Communications with their advisor
How Can You Reach Vernon Litigation Group?
Investors who want to learn more about this nationwide investigation, or who wish to discuss possible FINRA arbitration claims tied to EcoVest Capital or similar alternative investments, may reach Vernon Litigation Group at (239) 319-4434 to arrange a confidential consultation.
About Vernon Litigation Group
Vernon Litigation Group focuses its nationwide practice on securities disputes, representing investors in FINRA arbitration proceedings brought against broker-dealers and registered representatives. Founding partner Christopher Vernon carries Martindale-Hubbell's AV Preeminent® Peer Review Rating and has earned recognition from both Florida Super Lawyers and The Best Lawyers in America, with honors spanning securities and commercial litigation. Beyond his caseload, Mr. Vernon has provided expert-witness testimony and litigation support in investment disputes touching standards of care, suitability, due diligence, conflicts of interest, and alternative investments.
Frequently Asked Questions About EcoVest Capital FINRA Arbitration Claims
Did the DOJ's settlement with EcoVest Capital get investors their money back?
No. The 2023 settlement included no fines and no payment of money, so there is no investor restitution fund. Investors who lost money on an EcoVest Capital investment generally have to pursue that loss on their own, whether through the IRS settlement process, a FINRA arbitration claim against the selling broker-dealer, or both.
Is my FINRA arbitration claim against EcoVest Capital, or against my broker?
Against your broker. EcoVest Capital is the fund sponsor, not a FINRA member firm, so a FINRA arbitration claim runs against the broker-dealer and the registered representative who recommended and sold the investment.
Does accepting the IRS's 2026 settlement offer affect my FINRA arbitration claim against my broker?
Generally, no. These are two separate legal tracks: one resolves your tax dispute with the IRS, and the other addresses whether the broker-dealer who sold you the investment met its sales-practice obligations. Whether a particular settlement offer makes sense for your tax situation is a question for a tax professional. This article describes the deadlines and terms the IRS has announced; it is not tax advice.
How long do I have to respond to the IRS's 2026 settlement letter?
90 days from the date the letter issues, at a 10 percent penalty, with no payment required at the time of election. A further 45-day window follows at a 20 percent penalty, for 135 days total, with no extensions available after that. The IRS issues these letters to eligible partnerships, so the election is made at the partnership level rather than investor by investor.