Securities Fraud Lawyer Blog
On July 17, 2015 the California Department of Business Oversight obtained a desist and refrain order against the Citivest Residential Income and Total Return Fund.
The Order found that beginning on or about May 31, 2013, Citivest Residential Income and Total Return Fund, LLC offered and sold securities in the form of membership shares without obtaining a permit or other form of qualification authorizing any person to offer the securities in California. Additionally, the Fund failed to file the Form D exemption notice, consent to service of process, and filing fee with the California Securities Commissioner pursuant to Corporations Code section 25102.1, subdivision (d). Nor did the Fund file a Form D exemption notice with the Securities and Exchange Commission with respect to its various securities offerings as required by federal law (17 C.F.R. §230.503 (2014)).
Based upon its findings, the California Commissioner of Business Oversight concluded that the membership interests offered and sold by Citivest Residential Income and Total Return Fund, LLC were securities subject to the requirements of Corporations Code section 25102.1, subdivision (d), of the Corporate Securities Law of 1968 (Corporations Code section 25000 et seq.).
Furthermore, the Commissioner concluded that Citivest Residential Income and Total Return Fund did not meet the requirements of Corporations Code section 25102.1, specifically, the filing of a Form D exemption notice, consent to service of process, and filing fee with the Commissioner.
Pursuant to Corporations Code section 25532, subdivision (a)(2), Citivest Residential Income and Total Return Fund, LLC was hereby ordered to desist and refrain from the further offer of securities in Citivest Residential Income and Total Return Fund, LLC in the State of California, unless and until those requirements were met.
The Commissioner also concluded that the securities were offered and sold by means of oral or written communications which included an untrue statement of material fact or which omitted to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, in violation of Corporations Code section 25401. Specifically, the various subscription agreements of Citivest Residential Income and Total Return Fund, LLC represented that membership interests were being sold under exemption from registration as allowed by the Securities and Exchange Act of 1933, Section 4(2) and/or Regulation D (506) when, in fact, there had been a failure to satisfy this exemption due to a lack of a Form D exemption notice being filed with the Securities and Exchange Commission.
The Law Office of David Liebrader practices exclusively in the field of investment loss recovery and our securities attorneys have successfully resolved over 1000 investment loss cases over the past 20 years. Recoveries for clients top $40 million. The types of claims we have successfully handled include those involving unsuitable investments (suitability claims), excessive trading or “churning”, misrepresentations and omissions, unauthorized trading, over-concentration of illiquid or overly risky investments, pump and dump scams involving “penny stocks”, direct participation programs (private placements) involving real estate investment trusts (REITS), oil and gas exploration programs, leasing equipment deals and receivable financing, promissory notes whether sold through a broker dealer or as part of the outside business activities of a registered representative, ponzi scheme losses, failure on the part of the broker dealer to perform due diligence, state securities law (blue sky) violations and failure to supervise.
Investment losses can be recovered through a process known as FINRA arbitration. FINRA regulates broker dealers that sell investments, and provides an arbitration forum to resolve investor disputes. Investors can pursue claims against their brokerage firms in the FINRA arbitration forum. Common claims in the forum are those for suitability, breach of fiduciary duty, misrepresentations and omissions, negligence, violation of FINRA rules, state and federal securities laws violations, elder abuse, breach of contract and failure to supervise. On average, the recovery process takes approximately a year, from start to finish.
FINRA’s rules require that all investment recommendations made by licensed financial advisors be suitable in light of a customer’s needs, objectives and risk tolerance. In addition, all registered representatives are required to be properly supervised, with periodic inspections and reviews by qualified supervisors, whose job it is to vigorously investigate suspicions of wrongdoing (red flags).
If you have suffered investment losses please call The Law Office of David Liebrader at (702) 380-3131 for a free, confidential consultation