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Zamansky LLC Investigates Lighthouse Capital Group LLC Over Potential Investment Fraud In Sales of Regulation D, REIT and DST Offerings

May 17, 2023 Active Cases & Investigations

Our firm is investigating potential investment fraud claims by customers of Lighthouse Capital Group, LLC (Lighthouse Capital Group) in Pasadena, California.  In May 2023, Lighthouse Capital Group consented to an Acceptance, Waiver and Consent (AWC) with FINRA, the Financial Industry Regulatory Authority, which censured the firm and ordered a penalty fine of  $250,000.

According to the AWC, from 2017 to 2018, Lighthouse Capital Group raised $273 million through 65 private offerings while its supervisory system, including its written supervisory procedures, was not reasonably designed to comply with SEC Regulations to prevent general solicitation.   Without a robust supervisory system, Lighthouse Capital Group also could not comply with FINRA suitability requirements that protect investors, as well as properly supervise new sales of private offerings.

Lighthouse Capital Group specializes in selling private real estate offerings, usually structured in the form of Delaware Statutory Trusts (DSTs).   Over the past four years, Lighthouse Capital Group’s offerings include a series of ExchangeRight Net-Lease DSTs, the ExchangeRight Income Fund and other real estate DSTs and real estate investment trusts (REITs).  These private offerings should be sold only to qualified investors under SEC Rules.

Non-Public REITs and DSTs Can Become Illiquid

Non-public real estate offerings, such as DSTs, REITs and Regulation D private placements, are potentially high-risk investments that are not suitable for most investors.  These investments may be attractive on the surface because they may pay steady distributions and their price may not be subject to stock market volatility.  However, these investments may also suddenly become illiquid and cease all distributions and redemptions if the real estate market suffers a downturn. These investments are also rife for potential investment fraud and conflicts of interest.

Any investor in an ExchangeRight or other DST, REIT or Regulation D offering who has a concern should have their investment reviewed for potential investment fraud.  A claim for investment fraud may exist where a key risk, like illiquidity, was not disclosed, the investment incurs losses that are unsuitable or unexpected for the investor, or the investor has too much of his net worth invested in these illiquid investments.

What Can Investors Do? Speak to a Skilled Investment Fraud Attorney Today

If you are an investor in a DST, REIT or other Regulation D investment sold by Lighthouse Capital Group and wish to discuss whether you have a case for potential investment fraud, please call investment fraud attorney Jake Zamansky at (212) 742-1414 or by email at jake@zamansky.com, for a free evaluation of your potential legal rights.

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