The SEC has recently filed charges against Sunwest Management and former CEO Jon Harder. The SEC alleges that Sunwest misled investors by guaranteeing a steady income from tenancies-in-common investments. Sunwest raised $300 million from more than 1,300 and promised investors that the properties would generate annual returns of 10%. The SEC alleges that at least half the properties proved faulty and lost money. Sunwest allegedly paid investors from commingled funds and mortgage refinancings to cover any deficiencies in returns.
Tenancies-in-common, or “TICs”, are a type of concurrent ownership of real property by two or more parties. Mostly, investments like TICs are reserved for accredited investors meeting a very specific income and investment experience criteria.
The Tenant-In-Common Association (TICA), a TIC trade group, suggests that TICs be structured as securities to protect investors and advisors. While TICs are a legitimate investment when properly invested, Wes Larson of ClearView Real Estate Capital thinks real estate TICs will disappear as “no broker will want to take the risk of being run up on securities fraud.”
Recently there has been a spike in securities fraud allegations following the charges filed against DBSI, a TIC operator allegedly responsible for defrauding investors out millions of dollars. These charges along with the charges filed against Sunwest have seemingly discouraged investors from TIC securities investments.
Eccleston Law represents individual and institutional investors nationwide to recover their investment losses caused by securities fraud, unsuitable investment recommendations, breach of fiduciary duty, negligence or other misconduct. We have extensive experience representing investors in arbitration and litigation disputes with securities broker-dealers and investment advisory firms, and have recovered tens of millions of dollars for investors.
If you are an investor that has suffered losses investing with Jon Harder or in Sunwest Management, please contact one of our attorneys to discuss your recovery options.
FinancialCounsel.com, hosted by James J. Eccleston, is a companion website to this blog, along with EcclestonLaw.com. It contains complementary material of general interest to investors and financial services professionals. Investors will find material on securities arbitration to recover investment losses; industry and financial markets intelligence; and strategies for estate planning. Professionals have access to material on broker/adviser registration, regulation, compliance and disciplinary proceedings; industry and financial markets intelligence; strategies for estate planning; and broker/adviser employment litigation and injunctions, including defamation and non-competition/solicitation issues. 
