In November 2019, a former client of Ross, Sinclaire & Associates, LLC won an award in a FINRA arbitration for $1.96 million in compensatory damages and 12% interest per annum, as well as $140,567.08 in attorney’s fees and $750 for the non-refundable filing fee. FINRA found that was liable for misrepresentation and omission of material facts, and common law negligence.
The causes of action misrepresentation and omission of material facts; breach of fiduciary duty; common law fraud; common law negligence; and failure to supervise. The causes of action relate to Claimants’ private investment in Tax Credit Funding, LLC through the purchase of secured promissory notes. The FINRA arbitration hearing was conducted in Boca Raton, Florida.
Tax Credit Funding, LLC provides cash to producers in the form of a loan secured by state film tax incentives. According to the fund’s website, “Once the state film tax credits are monetized, the proceeds are used to pay back the loan and the remaining balance is paid to the production.” Tax Credit Funding, LLC began operating in 2015 to raise capital from investors. According to the fund’s Securities and Exchange Commission (SEC) Form D filing, the fund generated 2% sales commissions and 8% fees.
Tax Credit Funding, LLC is a type of private placement, which is a company that raises money through the sale of equity or debt securities. Private placements do not have to be registered with the SEC. Private placements are more risky investments that are suitable for high net worth and sophisticated investors. Private placements typically have higher fees and sales commissions as well, which makes them attractive for brokers to recommend and sell to their clients.
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, Ross, Sinclaire & Associates, LLC may be liable for investment or other losses suffered by its customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and 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.