YieldStreet Inc. is an online investment platform that markets its alternative investments as exclusive deals that are typically reserved for big investors. YieldStreet investors buy into “notes” that are designed to make scheduled cash distributions. These notes are loans, backed by a wide range of assets, including ships, legal settlements and even artwork. To date, YieldStreet has raised more than $1 billion from retail investors for these alternative investments.
SEC And FBI Investigating YieldStreet Investments
Recently, on August 12, 20202, the Wall Street Journal reported that the SEC and the FBI are investigating YieldStreet investments. Both federal agencies are investigating the company’s business practices, their dealings with customers and their marketing campaigns to investors.
More specifically, the SEC and the FBI are reportedly examining the circumstances surrounding approximately $90 million in YieldStreet marine notes, that were connected to loans for deconstructing large ships. The deconstruction process is a dangerous, labor-intensive undertaking that involves recovering scrap metals from old marine vessels. YieldStreet began raising money from investors for these marine funds, beginning in 2018.
In March, 2020, YieldStreet announced to investors that approximately a dozen vessels, which were the collateral securing the underlying marine funds, went missing in international waters. Unfortunately for YieldStreet marine investors, these funds have not made the scheduled cash distributions.
According to YieldSteet, the company is pursuing legal claims against various entities connected to the Lakhani family, in order to recover investors’ money for these marine funds. The Lakhani family has built their wealth in the niche of vessel deconstruction business. YieldStreet has sought a freeze on assets held by the Lakhani family, alleging that they fraudulently sold ships that secured the marine fund deals.
In addition, YieldStreet is pursuing insurance claims as well. YieldStreet has denied the existence of any investigation by the SEC or FBI, stating “[w]e do not believe that we are the target of any investigation.” However, one Florida-based investor in YieldStreet marine funds – disclosed that the FBI has interviewed him about his experience with YieldStreet.
YieldStreet offers investments such as Real Estate Investment Trusts (REITs), Litigation Finance, Marine Deconstruction, Marine Vessel Acquisitions, Rideshare Fleet Expansions, Vessel Deconstruction, Oil and Gas, among others. YieldStreet’s pitch focuses on the fact that many of their offerings are asset-backed, meaning that there is an actual asset that can be claimed and sold to recover the investment in the event of a default.
Contact Silver Law Group To Discuss Your YieldStreet Investment
If you have investment losses with YieldStreet, please contact Silver Law Group today for a no-cost consultation with our attorneys. Our nationally-recognized attorneys represent investors in class actions lawsuits, as well as securities arbitration claims against brokerage firms for stockbroker misconduct, lack of due diligence, and other causes of action. Please contact Scott Silver at ssilver@silverlaw.com or toll free at (800) 975-4345.