Eileen Epstein Carney
Eileen is involved in the firm’s securities practice and has over a decade of experience in the legal world. She received her law degree from American University in 2005.
Cardone Equity Fund Class Action Lawsuit
Cardon Equity Fund V and Cardone Equity Fund VI accused of misleading investors
Gibbs Law Group is investigating a class action lawsuit against Cardone Capital, LLC on behalf of investors in the Cardone Equity Fund V and Equity Fund VI. According to a recently filed lawsuit, Cardone Capital and its CEO, Grant Cardone, allegedly made false or misleading statements and omitted important information in connection with the public offerings of these two funds.
If you invested in Cardone Equity Fund V or Cardone Equity Fund VI, you may have a claim. Speak with an investment fraud lawyer to learn more about your options.
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Cardone Capital Accused of Misleading Investors; Funds Estimated Value May Be False
Cardone Capital is an investment company that provides real estate investment opportunities through crowdfunding. Cardone Equity Fund V and Cardone Equity Fund VI are reportedly large funds, with Cardone Equity Fund V being the “largest Reg A+ crowdfunding ever done for real estate investment of this quality using social media,” according to Grant Cardone’s Instagram.
According to a recently filed lawsuit, Cardone Capital and Grant Cardone targeted “everyday investors,” through social media. These solicitations were allegedly misleading to many investors. For example, the lawsuit complaint states that Grant Cardone assured investors through these solicitations that their investments would pay high monthly distributions and would return to investors at least two to three times their investment. He gave specific examples, as stated in the lawsuit complaint:
- Investing $100,000 would pay $500 in distributions monthly
- Investing $200,000 in the fund would result in a $660,000 “position” in the fund
- Investing $200,000 would allow investors to early $12,000-$15,000 in distributions a year
- The property investors invest in would triple in value in 5 to 7 years
However, according to the lawsuit, the actual distributions have been much less than these stated amounts. Further, the complaint states that Cardone had no reasonable basis for estimating investors’ distributions or the value of the property to be so high. As a result, these statements have been deemed false and misleading.
Grant Cardone Omits Risks of Cardone Equity Funds V and VI
In addition to allegedly misleading investors as to the value of the Cardone Funds, Grant Cardone is also accused of failing to disclose the risks of investing in these Funds. The lawsuit states that Cardone told investors that Cardone Capital was built on stable assets. However, Cardone reportedly failed to sufficiently warn investors of the risks involved in the particular real estate properties they would be investing in. This includes failing to disclose how the Fund’s properties would be financed, and the interest Cardone would charge the Funds to acquire such properties.
According to the complaint, Cardone used investor funds to pay the debt service for the Funds.
Investors who feel they were misled about the risks of investing in the Cardone Equity Funds may have a claim. Contact us today to learn more about your options.
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