fbpx
 

Yieldstreet Losses? | Yieldstreet Investor Lawsuits | Yieldstreet Investment Lawyers

Peiffer Wolf represents Yieldstreet investors who have suffered losses and filed a class action lawsuit in the Southern District of New York on September 9. 2020. Yieldstreet offers a mix of exotic investments like Real Estate Investment Trusts (REITs), Litigation Finance, Marine Deconstruction, Marine Vessel Acquisitions, Rideshare Fleet Expansions, Vessel Deconstruction, Oil and Gas, and many more. Although Yieldstreet’s offerings are pitched as asset-backed, many borrowers affiliated with the investments have either defaulted or gone bankrupt. Now, Yieldstreet is even claiming that some borrowers have acted fraudulently. If you are a Yieldstreet investor, Contact us immediately for a FREE Consultation.

 

The class action lawsuit states:  “The end result is that, claims of no principal loss, in-depth ‘diligence,’ and reliance on ‘asset class experts’ notwithstanding, YieldStreet’s products are poorly sourced and structured, with a default rate five times higher than even that of so-called ‘junk bonds.’  YieldStreet’s junk bonds, however, are mass-marketed to the general public and may be purchased within a matter of minutes by anyone with access to a computer who self-certifies that they earn over $200,000 a year.”

UBS YES

INVESTORS WHO LOST $100 MILLION SUE YIELDSTREET, THE FINTECH FIRM CREATED TO EXPLOIT SEC’S EASING OF “ACCREDITED INVESTOR” RULES 

 

“Blind Leading the Blind”: Poorly Sourced and Structured, YieldStreet Products Have “Default Rate 5 Times Higher Than … Junk Bonds”; Investors Sunk Crowdfunded Money in Venture to Literally Disassemble Ships … As Well as Oil & Gas Wells, Real Estate, and Modern Art.

 

 NEW YORK CITY – September 9, 2020 — Just seven years after it was created to take advantage of U.S. Securities and Exchange Commission (SEC) rules relaxing the definition of supposedly sophisticated “accredited investors,” the fintech firm YieldStreet is facing litigation filed by investors who lost more than $100 million in a spectacular series of defaults of high-risk and misleadingly marketed alternative investment products.  For details on the lawsuit filed today by Peiffer Wolf Carr Kane & Conway (“Peiffer Wolf”) and Sonn Law Group, go to https://brokerwatch.com/yieldstreet-lawsuit/.

 

The class action lawsuit brought by four investors in US District Court for the Southern District of New York, states:  “The end result is that, claims of no principal loss, in-depth ‘diligence,’ and reliance on ‘asset class experts’ notwithstanding, YieldStreet’s products are poorly sourced and structured, with a default rate five times higher than even that of so-called ‘junk bonds.’  YieldStreet’s junk bonds, however, are mass-marketed to the general public and may be purchased within a matter of minutes by anyone with access to a computer who self-certifies that they earn over $200,000 a year.”

 

The FBI and SEC have both been seeking information about the fintech firm’s practices, interactions with customers, marketing of its crowdfunded products and overall business dealings.  The lawsuit filed today focuses on false and misleading statements YieldStreet made to investors to induce them to purchase certain YieldStreet investment products, including vessel deconstruction funds, oil & gas wells, commercial real estate, and modern art.

 

Joseph Peiffer, attorney and managing shareholder, Peiffer Wolf, said: “Simply put, YieldStreet’s overexposed, concentrated loan model was doomed to fail—a ‘sinking ship,’ both literally and figuratively. Duped investors were purchasing YieldStreet’s vessel deconstruction products at a fever-pace, but none of them knew that the same borrower was on the other end of every deal. YieldStreet and Mr. Weisz were utterly unconcerned with this risk.”

 

Michael Tecku, an Austin, Texas man who lost a substantial amount of money in YieldStreet, said: “The dream of Yieldstreet was beautiful, but the reality is a nightmare. These investments were marketed as low risk asset-backed institutional investments run by experts with reasonable returns, but the truth is, there are no experts and there is no institution. It’s just one group of hustlers being out-conned by another.”

 

YieldStreet aggressively markets its “innovative products” to the general public through social media and direct email campaigns that drive potential investors to YieldStreet’s online investment portal, www.YieldStreet.com.  That online portal serves as a one-stop shop through which investors can peruse, self-accredit, and purchase investments.

 

YieldStreet tried to deflect its investment team’s lack of experience by claiming reliance on “asset class experts” to help originate, structure, and service YieldStreet’s deals.  However, the experts’ recommendations and warnings were ignored by YieldStreet’s president, Michael Weisz, who exercises complete control over YieldStreet’s investment decisions and, in a classic ‘other people’s money’ paradigm, bases those decisions on what will maximize YieldStreet’s fee receipts, without regard to the potential loss of investor funds.

 

YieldStreet’s mismanagement started to come to light in March 2020, when one by one its vessel deconstruction funds started to default. Instead of owning up to its misdeeds, YieldStreet has instead gone on the offensive, accusing the borrower and the expert YieldStreet consulted to structure the deal (whose advice YieldStreet ignored) of “fraud” and “mismanagement.”  In reality, Mr. Weisz and Yieldstreet are to blame, as they have built an entire portfolio on the premise of ill-founded and/or poorly sourced deal structures.

 

Jeff Sonn, managing partner, Sonn Law Group, said: “As of the end of the first quarter of 2020, nearly one-third of Yieldstreet’s portfolio was in default. At best, this was a case of the ‘blind leading the blind.’ YieldStreet falsely claimed to have a track record, specialized insights, and a history of success handling tens of millions of dollars of investors who were termed ‘accredited,’ but often not very sophisticated.”

 

In July 2013 the SEC enacted Rule 506(c) permitting general solicitation of accredited investors.  YieldStreet was formed soon thereafter, promising to provide accredited investors with “access to innovative income generating products.”

 

If you are a Yieldstreet investor, Contact Us Today by calling 504-523-2434 or by filling out an online Contact Form for a FREE Consultation. Concerns about possible misconduct and fraud are serious, and we are committed to fighting on your behalf.

 

The law firm Peiffer Wolf Carr Kane & Conway maintains offices in New York, Los Angeles, Cleveland, San Francisco, St. Louis, Austin, and New Orleans. More information is available on the web at https://brokerwatch.com/yieldstreet-lawsuit/.

 

Sonn Law Group maintains offices in Orlando, Miami, Boca Raton, Atlanta, and Houston. More information is available on the web at https://www.sonnlaw.com/.

 

DOWNLOAD PRESS RELEASE HERE

 

DOWNLOAD COMPLAINT HERE

 

MEDIA CONTACT:  Alex Frank, (703) 276-3264 or afrank@hastingsgroup.com.

YieldStreet is among a growing crop of crowdfunding and online alternative investment platforms, most of which have launched in the wake of the 2012 JOBS Act and its related SEC regulations. Currently, YS offer its investments under Reg D, which allows them to “generally solicit” or advertise their investments.

 

Yieldstreet offers a mix of exotic investments like Real Estate Investment Trusts (REITs), Litigation Finance, Marine Deconstruction, Marine Vessel Acquisitions, Rideshare Fleet Expansions, Vessel Deconstruction, Oil and Gas, and many more.  The pitch focuses on the fact that many, if not all, of their offerings are asset-backed. Meaning, in theory, there is an actual asset that can be claimed and sold to recover the investment in the event of a default.

 

Although the offerings are pitched as asset-backed, many borrowers affiliated with the investments have either defaulted or gone bankrupt. Now, Yieldstreet is even claiming that some borrowers have acted fraudulently. Many investors have received letters and emails from Yieldstreet that detail scenarios where borrowers have defaulted and even highlight accusations of fraud.  If you have invested with Yieldstreet in any of their offerings, please contact us immediately for a FREE Consultation.

 

For one group of offerings, the company President addressed investors about alleged borrower fraud and mass defaults in the Marine, Vessel, and Deconstruction categories. Now, Yieldstreet investors who suffered losses are contacting the securities lawyers at Peiffer Wolf Carr Kane & Conway.

 

Current or Former Yieldstreet Investor? | 504-523-2434

 

If you are a Yieldstreet investor, Contact Us Today by calling 504-523-2434 or by filling out an online Contact Form for a FREE Consultation. Concerns about possible misconduct and fraud are serious, and we are committed to fighting on your behalf.

Get a FREE case Evaluation.



    Bad Brokers in the news

    Victim of Investment Fraud or Broker Misconduct? We Fight for You.