Plot Thickens in Aequitas Saga; Investors File Suit Against Tonkon Torp, Deloitte

Aequitas Capital Management investors filed a class action lawsuit on April 4, 2016 against Portland law firms Tonkon Torp and Sidley Austin and the accounting firms Deloitte & Touche and EisnerAmper, claiming the firms enabled the massive Ponzi scheme.

The April complaint (the “Complaint”) has been brought on the heels of a complaint the Securities and Exchange Commission (“SEC”) filed against Oregon-based Aequitas and its principals in March.  Silver Law Group is currently investigating claims against Aequitas and Registered Investment Advisor (“RIAs”) firms with respect to possible violations of federal securities.

The Complaint alleges that the aforementioned firms are responsible to pay for the investors losses because they aided in the unlawful sales of Aequitas securities after Aequitas made numerous “extensive and pervasive” misrepresentations.

Specifically, the Complaint alleges that the auditing firms, Deloitte and EisnerAmper, prepared financial statements for Aequitas between 2011 and 2014, and these statements were provided to prospective investors and existing investors deciding whether to invest or re-invest and these statements were not accurate.

Additionally, the Complaint alleges that the law firms, Tonkon Torp and Sidley Austin, provided legal services to Aequitas in connection with the sale of securities that have left investors holding the bill.  These legal services, according to the Complaint, included offering documents, risk disclosures, subscription agreements, and promissory notes.

The Complaint argues what many investors argue: The named firms gave Aequitas and its business an air of legitimacy, operating closely to it and probably aware or should have been aware of the fraud occurring.  The firms are responsible for the losses.

The same could be said about the numerous RIAs who marketed and sold Aequitas securities to investors.  These RIAs had the financial statements and other research reports at their fingertips in order to fulfill the requirement of investigating and conducting due diligence in order to form a reasonable basis for recommending Aequitas securities.

Unfortunately, many RIAs did not.  In fact, some of the RIA firms that sold Aequitas securities snuggled up a little too close to Aequitas and affiliated entities.  CliftonLarsonAllen Wealth Advisors’ CEO, Tony Hallada, made multiple cameos in Aequitas promotional videos and the firm owns 49 percent of Innovator Management with Aequitas and its CEO, Robert Jesenik, owning the remaining 51 percent.

Besides, financial statements and research reports, Aequitas’s business model emphasized purchasing large portfolios of student loans from troubled for-profit Corinthian Colleges, which closed down in April 2015, was recently ordered to pay $1 billion to misled former students (Insert hyperlink to “Aequitas Business Partner Corinthian Colleges Ordered to Pay”), and whose former students have recently been declared eligible for student loan forgiveness by the U.S. Department of Education.  Student loan forgiveness is usually reserved in very limited circumstances.

Silver Law Group has helped numerous investors recover lost money due to RIAs and broker-dealers unsuitable and negligent recommendations.

If you invested in Aequitas Management LLC; Aequitas Commercial Finance, LLC; Aequitas Holdings, LLC; Aequitas Capital Management, Inc.; and/or Aequitas Investment Management, LLC, you may be entitled to recover some or all of your investment losses.  Please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345 to speak to an attorney to find out how we may be able to help you recover some of your investment losses.