Erez Law is currently investigating Vestin Capital, Inc. owner Michael Shustek (CRD# 1200817) regarding real estate investment trust (REITs) losses. Shustek was registered with MVP American Securities in San Diego, California from 2012 to 2018. Prior to that, Shustek was registered with Vestin Capital, Inc. in Las Vegas, Nevada from 1999 to 2006.
In July 2021, the Securities and Exchange Commission (SEC) announced charges against Shustek, who is the CEO of several REITs in Las Vegas. Shustek is also the owner of the investment advisory firm, Vestin Mortgage LLC.
According to the SEC complaint, beginning in 2012, “Shustek fraudulently enriched himself and one of the REITs he controlled, The Parking REIT, at the expense of two publicly traded REITs that he earlier had founded, Vestin Realty Mortgage I (“VRTA”) and Vestin Realty Mortgage II (“VRTB”).”
The SEC order alleges that “Shustek drained $29 million from VRTA and VRTB in order to funnel the money into The Parking REIT and later directed VRTA and VRTB to enter into a series of money-losing transactions in which the same six buildings were repeatedly re-sold, all to benefit himself and The Parking REIT. The complaint also alleges that Shustek deceived the boards of directors of VRTA and VRTB-and violated his fiduciary duties to those companies-in two separate securities transactions to get the companies to pay him almost $10 million. Finally, the complaint alleges that Shustek repeatedly misled investors by causing VRTA and VRTB to make false and misleading statements in their public filings, which hid his self-dealing.”
The SEC’s complaint charged Shustek and Vestin Mortgage with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Section 17(a) of the Securities Act of 1933, and Sections 206(1) and (2) of the Investment Advisers Act of 1940, and Shustek with aiding and abetting violations of Section 13(a) & Rules 13a-13 and 12b-20 of the Exchange Act. The complaint seeks permanent injunctions, disgorgement, prejudgment interest, civil penalties, and an officer and director bar and penny stock bar against Shustek.
Shustek faced two prior regulatory actions in 2006 and 2012.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Vestin Mortgage LLC may be liable for investment or other losses suffered by Shustek’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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