Bakhtiari & Harrison is currently investigating brokers nationwide who recommended their clients invest in iCap Equity, LLC. This high-risk Regulation D private placement was unsuitable for many investors.
iCap Equity, LLC Private Placement Losses
Regulation D private placements, like those from iCap Equity, LLC, are often not suitable for conservative and inexperienced investors. Unfortunately, many brokers recommended these investments without properly considering the investors’ experience or risk tolerance.
In 2015, iCap Equity filed a Form D to raise $50 million, offering brokers and financial advisors a 10% commission on sales. Investors were required to commit a minimum of $100,000.
Private placements are not sold on public exchanges, necessitating thorough due diligence by brokers to ensure the suitability of these investments for their clients. Such investments are complex and risky, intended for sophisticated investors with high net worth. Learn more about what investors should know regarding private placements.
These investments do not register with the Securities and Exchange Commission (SEC), lacking the transparency of publicly traded securities. This lack of visibility often prevents investors from accurately monitoring their investments’ performance.
iCap Equity, LLC was marketed as a safe, income-producing investment independent of market fluctuations. However, it is an illiquid, speculative investment without the stringent reporting requirements of publicly traded companies. Consequently, investors often discover a company’s financial troubles too late, resulting in significant losses.
Due to its illiquid nature, investors cannot typically sell their investments without substantial losses. Brokers might have been motivated by the high commissions—10% or more—when recommending iCap Equity, LLC.
iCap Equity, LLC Files for Bankruptcy
In March 2023, iCap Equity, LLC’s CEO informed investors that economic conditions, including inflation and rising interest rates, were worsening. These factors impacted their real estate portfolio and their ability to return capital to investors as initially promised.
As a result, iCap Equity, LLC ceased making monthly interest payments, leading to significant losses for many investors. In August 2023, the CEO resigned, citing challenges in growing the real estate portfolio.
In September 2023, iCap Enterprises and its funds filed for Chapter 11 bankruptcy. Paladin Management Group has taken over the firm’s business decisions, assessing its real estate inventory, legal claims, and liquidation plans.
Funds Issued by iCap Equity
iCap Equity, LLC issued several funds, all included in the Chapter 11 bankruptcy proceedings:
- 725 Broadway, LLC
- iCap @ UW, LLC
- iCap Broadway LLC
- iCap Campbell Way LLC
- iCap Enterprises, Inc. (formerly Altius Development, Inc.)
- iCap Equity LLC
- iCap Funding LLC
- iCap Holding 5 LLC
- iCap Holding 6 LLC
- iCap Holding LLC
- iCap Investments, LLC
- iCap Management LLC
- iCap Northwest Opportunity Fund, LLC
- iCap Pacific Development LLC
- iCap Pacific Income 4 Fund, LLC
- iCap Pacific Income 5 Fund, LLC
- iCap Pacific Northwest Opportunity and Income Fund, LLC
- iCap Pacific NW Management, LLC
- iCap Realty, LLC
- iCap Vault, LLC
- iCap Vault I, LLC
- iCap Vault Management, LLC
- Senza Kenmore, LLC
- UW 17TH AVE, LLC
- Vault Holding, LLC
- Vault Holding 1, LLC
- VH 1121 14th, LLC
- VH 2nd Street Office LLC
- VH Pioneer Village LLC
- VH Senior Care LLC
- VH Willows Townhomes, LLC
Brokerage Firms Recommended iCap Equity, LLC
Brokerage firms across the country recommended or endorsed iCap Equity, LLC or its associated funds, including:
- Advisory Group Equity Services, Ltd.
- Ausdal Financial Partners, Inc.
- Bradley Wealth Management, LLC
- Center Street Strategies Securities, Inc.
- Chauner Securities, Inc.
- Claraphi Advisory Networks, LLC
- Financial Partners, Ausdal, Inc.
- Freedom Investors Corp.
- Gardner Financial Services, Inc.
- IBS Financial Services, Inc.
- Meyers Associates, LP
- Pariter Securities, LLC
- Stillpoint Capital, LLC
- Titan Securities
- Wall Street Strategies, Inc.
For more information on iCap Equity investor losses, contact Bakhtiari & Harrison.