Cardone Capital, LLC Class Action Lawsuit
- Company Name
- Cardone Capital, LLC
- Class Period
- Purchasers of interests in Cardone Equity Fund V, LLC and Cardone Equity Fund VI, LLC
- Central District of California
The Cardone Capital, LLC class action lawsuit charges Cardone Capital and its Chief Executive Officer, Grant Cardone, with violations of the Securities Act of 1933. Filed in the Central District of California, the Cardone Capital class action lawsuit seeks to represent purchasers of interests in Cardone Equity Fund V, LLC (“Fund V”) and Cardone Equity Fund VI, LLC (“Fund VI”). The Cardone Capital class action lawsuit was commenced on September 16, 2020 and is captioned Pino v. Cardone Capital, LLC, No. 20-cv-08499.
Cardone Capital provides real estate investment opportunities to the so-called “everyday investor” through real estate crowdfunding. According to Cardone Capital’s website, Cardone Capital “finds the deals, negotiates the purchase and financing, and closes the deal,” generating rental payments from creditworthy tenants to pay monthly cash distributions to investors.
The Cardone Capital class action lawsuit alleges that, in addition to certain “test the waters” communications, defendants made materially false and misleading statements regarding: (1) whether investors would obtain a 15% internal rate of return on their investments; (2) the amounts of monthly distributions they would receive; and (3) investors’ debt obligations. The Cardone Capital class action lawsuit further alleges that defendants made materially false and misleading statements in the offering documents and omitted to state material facts relating to how the acquisition of properties to be owned by Fund V and Fund VI would be financed and the interest Cardone would charge the funds for loaning “the aggregate principal balance” to acquire those properties. Cardone Capital also represented to investors that it would pay monthly distributions based on cash flows from operations when, in fact, Cardone Capital suspended monthly distributions in April 2020.
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