Blau & Malmfeldt is currently investigating SCI Real Estate Investments, LLC (“SCI Real Estate”). Founded in 1994, SCI Real Estate raised money from investors in recent years through tenant-in-common programs and through the issuance of securities by various affiliated entities. Numerous brokerage firms sold SCI Real Estate investments to their retail brokerage customers.
The SCI Capital Group Mezzanine Fund (the “Mezzanine Fund”) appears to have been troubled from the very beginning. The Mezzanine Fund never invested in real estate but rather in unsecured loans to SCI Real Estate and its affiliates.
In February 2011, SCI Real Estate and its affiliates filed for bankruptcy in the U.S. Bankruptcy Court for the District of California. In June 2012, the court approved the trustee’s plan of liquidation. Investors who were sold SCI Real Estate investments have recovered only fractions of their investments through the bankruptcy proceeding.
SCI Real Estate’s various investments were always quite risky. Many brokerage firms misled their customers about the risks. It also appears that many brokerage firms failed to perform adequate due diligence before recommending and selling SCI Real Estate Investments to their customers. Brokerage firms are required to perform due diligence before recommending private securities offerings.
If you believe that you were misled about the risks of a SCI Real Estate Investment, or if your broker recommended that you concentrate your savings in real estate investments, it is possible that you may be able to recover your losses by pursuing a claim against your brokerage firm in arbitration.
Contact Blau & Malmfeldt at 312-443-1600 or email Paul Malmfeldt at firstname.lastname@example.org to discuss your recovery options. Blau & Malmfeldt is a law firm based in Chicago that represents investors across the United States in disputes with securities industry members.