Options for Clients Who Lost Money Investing in Walton Land Fund Companies
Posted on Tuesday, April 14th, 2020 at 1:52 pm
Erez Law is currently investigating brokers across the country who recommended their clients invest in Walton Land Fund Companies (Walton Land). It is alleged that brokers recommended their clients invest in Walton Land Fund Companies despite that these investments are not suitable for many investors, especially unsophisticated and conservative investors 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. The high-risk private placement invests in vacant undeveloped properties that no longer generate income, hoping to one day sell the properties at a profit to funds who will later develop those properties. However, during the time Walton Land Fund Companies owns the properties, they are responsible for the costs to carry and maintain the properties, all while these properties are not generating 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.”
According to public records, it was found that some properties were marked up as much as five times the original cost. Walton Land Fund Companies has more than $3.8 billion in assets across North America and 106,000 acres of land under ownership, management, and administration in its portfolio in the United States.
It was also found that brokers earn large commissions as high as 13.25% on their clients investing in Walton Land Fund Companies, which is perhaps one incentive for brokers to recommend these investments in their clients’ portfolios. Most speculative investment recommendations earn brokers an average of 6% commission.
According to recent figures, more than 92,000 investors invested in Walton Land Fund Companies, and many of their shares are now worth just 20% of what they paid.
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 explained to their investors the potential risks to investing in Walton Land Fund Companies investments and now these investors have now suffered significant investment losses.
Brokers at brokerage firms across the country did not disclose the significant risks involved with investments in Walton Land Fund Companies.
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, brokerage firms across the country 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.