Bakhtiari & Harrison is currently investigating brokers nationwide who recommended their clients invest in Walton Land Fund Companies (Walton Land). It is alleged that brokers advised their clients to invest in Walton Land despite these investments being unsuitable for many investors, particularly those who are unsophisticated or conservative and looking to preserve their capital or generate income.
Owned by Walton Global Holdings, Walton Land Fund Companies is a private placement that is highly speculative in nature. This high-risk investment involves purchasing vacant, undeveloped properties that do not generate income, with the hope of eventually selling them at a profit to funds that will later develop these properties. During the period that Walton Land Fund Companies owns these properties, they are responsible for the costs of carrying and maintaining them, all while the properties are not generating any income.
According to its website, “Walton’s multi-phase investment approach begins with identifying the right parcel of land for acquisition, syndicating the land through investment structures best suited to our global sales channels, managing the land during its hold period, and ultimately divesting the land for a projected overall profit.”
Public records reveal that some properties were marked up as much as five times their original cost. Walton Land Fund Companies boasts more than $3.8 billion in assets across North America and manages 106,000 acres of land in the United States.
It was also discovered that brokers earned substantial commissions, as high as 13.25%, for recommending investments in Walton Land Fund Companies, providing a strong incentive for brokers to include these investments in their clients’ portfolios. Most speculative investment recommendations yield brokers an average commission of 6%.
Recent figures show that over 92,000 investors have invested in Walton Land Fund Companies, with many of their shares now worth just 20% of their original value.
The Walton Land Fund Companies’ investments include:
- Walton U.S. Development Fund, LP
- Walton U.S. Land Fund 1, LP
- Walton U.S. Land Fund 2, LP
- Walton U.S. Land Fund 3, LP
- Walton U.S. Land Fund 4, LP
- Walton U.S. Land Fund 5, LP
- Walton U.S. Land Fund 6, LP
- Walton U.S. Land Fund 7, LP
Unfortunately, brokers may not have adequately explained the potential risks associated with investing in Walton Land Fund Companies, leading many investors to suffer significant losses. Brokers at firms nationwide failed to disclose the substantial risks involved with these investments.
According to FINRA Rules, member firms are responsible for supervising a broker’s activities during their registration period with the firm. Therefore, brokerage firms across the country may be liable for investment or other losses suffered by their customers.
Bakhtiari & Harrison represents investors in the United States in claims against brokers and brokerage firms for misconduct. If you have experienced investment losses, please call us at 310-499-4732. Bakhtiari & Harrison is a nationally recognized law firm representing individuals, trusts, corporations, and institutions in claims against brokerage firms, banks, and insurance companies.