Cypress Income Fund II Investment Losses
Shareholders in Cypress Income Fund II recently received a second letter regarding the funds default. According to the letter, Cypress was unable to make all payments on an indenture, Master Note, held by the Bank of Utah. Furthermore, Cypress informed the bank, that contracts for the sale of the funds assets would be insufficient to pay the Master Note in full.
According to the letter, once the assets are sold and distributions made to shareholders, no other payments should be expected. The letter went on to inform holders that the fund Manager agreed not to deduct their 7.5% incentive fee from proceeds resulting in a significant increase in the distributions to be made.
Upon information and belief, Cypress Income Fund investors received a near identical letter. According to SEC files, both funds were private placement offerings.
Private placements are a means for smaller companies to raise capital through the sale of equity or debt securities without having to register their securities with the SEC. These investments are often riskier and more complicated than traditional investments, and are only suitable for high net worth, sophisticated investors.
The White Law Group continues to investigate the liability that FINRA registered brokerage firms may have for improperly selling high-risk private placements, like Cypress Income Fund II, to their clients.
Brokerage firms have an obligation to perform due diligence on any investment they offer and to ensure that all recommendations made are suitable in light of the client’s age, investment experience, net worth, income, and investment objectives. If a broker-dealer recommends an investment unsuitably, the firm can be held responsible for losses in FINRA arbitration claim.
Recovery of Investment Losses
To speak with a securities attorney regarding your investment in a Cypress private placement offering, please call The White Law Group at (888) 637-5510 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
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