Kaplan Rothstein Prüss Peraza, P.A. is investigating securities brokerage firm Herbert J. Sims & Co. Inc. (“HJ Sims”), for its sales of certain SEC Regulation Reg D (“Reg D”) securities. HJ Sims sold at least 84 different Reg D private securities offerings during the last decade.
A recent study regarding HJ Sims’ sales of Reg D securities to investors found that they were placed in a conflict of interest. Specifically, the study states that HJ Sims executives made large investments in the securities and they would profit handsomely if the securities performed well. But, HJ Sims allegedly would shift the losses to customers if the securities did not perform well. This shifting of risk to customers could have caused HJ executives to make riskier investments because they could simply shift the risk to HJ Sims’ customers. Under federal securities laws, broker-dealers recommending Reg D private placements are subject to FINRA Rules 5122 and 5123, which require the filing of offering documents and any retail communications that promote or recommend the placement, and brokers remain bound by the antifraud provisions of the Securities Act of 1933 regardless of a Reg D exemption from registration. The SEC’s investor guidance makes clear that any information provided in connection with a private placement must not contain material misstatements and must not omit any material facts necessary to prevent the statements made from being misleading.
At least 10 of the Reg D securities offerings have failed to make their interest payments and/or principal payments. Moreover, HJ Sims may have reported values to customers that were not accurate. Those Reg D offerings are as follows:
Cypress Point Funding LLC
Gryphon Finance I, LLC
Hawkeye Village Finance I, LLC
HJSI Athena Portfolio Finance LLC
Madison Funding I, LLC
Poet’s Walk Funding I, LLC
Riverchase Funding LLC
Sims Cathcart Funding LLC
Tuscan Isle ChampionsGate Holdings LLC
Tuscan Isle Holdings 1, LLC
What Can Investors Do?
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About Kaplan Rothstein Prüss Peraza, P.A.
Kaplan Rothstein Prüss Peraza P.A., is a nationally recognized, preeminent investor rights law firm that represents investors who have lost money as a result of investment fraud or broker misconduct. Contact a KRP2 investment fraud lawyer for a FREE consultation about your potential claims. With offices in Miami, Los Angeles, West Palm Beach, New York, and Naples, Kaplan Rothstein Prüss Peraza represents investors nationwide. We can be reached at info@krp2.com or 855-758-0653. To learn more about KRP2, you can review our website at www.krp2.com.
