iCap Equity: Letter to Investors
According to a letter to investors on March 20, 2023, iCap Equity LLC will no longer be able to make monthly interest payments to its shareholders blaming the “monumental challenges” for the real estate capital markets due to rising interest rates and inflation.
The real estate sector is struggling to respond to the “unprecedented speed” with which interest rates are rising as inflation continues to increase, according to the company. The current global economic environment has also impacted and severely restricted lending options that have resulted in fewer transactions in the market, according to the letter. The company further notes that it seems that interest rates will continue rise in the near future, meaning “things will likely worsen.”
ICap Equity went on to say that quite a few other notable and sophisticated real estate investment firms have recently announced that they are suspending payments to investors or that they have defaulted on their loan obligations.
According to the company, its goal remains to do what is in the best interest of the investors and its full attention has been turned to “the preservation of your capital.”
iCap Equity notes that it is preparing a detailed report to provide information regarding the state of our portfolio, the impact of recent economic conditions on the portfolio, and a proposed plan for how to move forward. The company will reportedly reach out to set up a call to present this plan in the next few weeks.
The Risks of Alternative Investments
Private Placements under Regulation D are typically sold by brokerage firms in exchange for a large up-front commission. High commissions can range from 7-10%, as well as additional “due diligence fees” that can range from 1-3%. In this offering, the filing indicates that the sales commissions and fees were estimated at 6% of the total offering amount.
The problem with private placement investments such as ICap Equity is that they typically involve a high degree of risk. They are often sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds. They also tend to be illiquid and when ready to sell, it is often difficult to find a buyer. Although you may be able to sell these investments through a secondary market, it may be at a financial loss.
How to Recover Investment Losses
The White Law Group is investigating potential claims involving brokerage firms who may have for improperly recommended high-risk private placements and non-traded REITs to investors.
Broker dealers are required to perform adequate due diligence on any investment they recommend. They must ensure that all recommendations are suitable for the investor. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim.
FINRA Dispute Resolution is an arbitration venue for investors with claims against their brokerage firm or financial professional. It provides investors with an opportunity to attempt to recoup their investment losses and is an alternative to filing such claims in court.
To learn more, please see: Regulation D Private Placement Fraud Attorneys
If you have concerns regarding your investment in iCap Equity and would like to speak with a securities attorney about your options, please call The White Law Group at 888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.
For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit https://www.whitesecuritieslaw.com.
Tags: ICap Equity, ICap Equity complaints, icap equity distributions, ICap Equity help, ICap Equity high commissions, ICap Equity information, ICap Equity investigation, ICap Equity investment, ICap Equity investment losses, ICap Equity investor relations, ICap Equity investors, icap equity monthly payments Last modified: March 23, 2023