Waterway Grove Holdings Lawsuit: EcoVest Conservation Easement – Help for Investors
Waterway Grove Holdings, LLC, a syndicated conservation easement sponsored by EcoVest Capital, is one of the offerings named in a November 2026 FINRA arbitration claim filed by The White Law Group. The firm is investigating potential claims on behalf of other investors whose financial advisors recommended Waterway Grove Holdings. Investors may be able to recover losses, including tax-related damages, through FINRA arbitration.
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Waterway Grove Holdings Lawsuit: FINRA Claim Filed
The White Law Group’s claim was filed against The Strategic Financial Alliance on behalf of a group of South Dakota and Iowa investors. According to the Statement of Claim, their broker allegedly recommended several syndicated conservation easements, including Waterway Grove Holdings, that did not fit the investors’ goals or need for access to their money. The claim also alleges the firm failed to supervise the broker.
What Is Waterway Grove Holdings?
Waterway Grove Holdings, LLC is a Delaware limited liability company formed in 2016 and headquartered in Atlanta, Georgia. Its Form D identifies EcoVest Capital as the managing entity. Investors bought units in the partnership, which was set up to hold land and donate a conservation easement on it.
The appeal was the tax deduction. Syndicated conservation easements were commonly pitched as producing a charitable deduction of roughly four dollars for every dollar invested, based on an appraisal of the land.
Offering Terms
Waterway Grove Holdings claimed the Rule 506(b) exemption from SEC registration and made its first sale on December 22, 2016. According to the Form D, the offering raised $14,024,724 from 146 investors. The minimum investment was $13,935.
Estimated sales commissions totaled $1,616,773, or about 11.5% of the money raised.
EcoVest Lawsuit and IRS Scrutiny
The Department of Justice sued EcoVest Capital in December 2018, alleging its conservation easement programs passed inflated deductions to investors. A federal judge approved a settlement in March 2023 that permanently bars EcoVest from deals involving conservation easement deductions. EcoVest and its executives paid $6 million and did not admit the allegations.
The IRS has designated many syndicated conservation easements as listed transactions and has challenged deductions across the industry. In 2026, it offered a limited settlement window to partnerships in easement disputes, then set up a new Office of Conservation Easements to handle remaining cases.
Broker Due Diligence Obligations
According to the Form D, these firms received sales compensation for Waterway Grove Holdings:
- Center Street Securities
- DFPG Investments
- Dyche Wealth Management
- Kalos Capital
- Lion Street Financial
- Money Concepts Capital Corp
- Prakash Investment Advisors
- The Strategic Financial Alliance
- Triloma Securities
- United Planners Financial Services
A brokerage firm has to investigate a private placement before its advisors recommend it. A conservation easement deal depended on an appraisal the IRS was already questioning, so the risk of losing the deduction should have been part of that review. Firms that sold the offering without that work, or to investors it didn’t suit, may be liable for the losses.
Risks of Private Placement Investments
- Deduction disallowed: If the IRS rejects the easement value, investors can owe back taxes, interest, and penalties.
- Money invested is gone: Investors typically cannot get back what they paid for their units.
- No way out: Partnership interests cannot be sold on any market.
- Heavy fees: More than a tenth of the money raised went to sales commissions alone.
Recovering Investment Losses
An IRS settlement only resolves what you owe the government. It does not cover what your broker may owe you. Investors who bought Waterway Grove Holdings through a brokerage firm may be able to seek their investment, tax-related damages, and interest from that firm.
Contact The White Law Group
The White Law Group is a national securities fraud law firm with offices in Chicago and Seattle. Our FINRA arbitration attorneys represent investors in claims involving EcoVest conservation easements and other private placements.
If you invested in Waterway Grove Holdings, call (888) 637-5510 for a free consultation, or contact us online.
Frequently Asked Questions
How do I file a claim to recover money I invested in Waterway Grove Holdings?
You bring a claim against the brokerage firm that sold you the units. Most brokerage account agreements include a pre-dispute arbitration clause, so the claim usually goes to FINRA arbitration rather than court. An arbitration panel can award money, including tax-related damages.
Why was Waterway Grove Holdings a risky investment?
Its value to investors depended almost entirely on a tax deduction the IRS could reject. When that happens, investors lose the deduction and their investment and can still owe taxes and penalties.
Is the brokerage firm responsible if EcoVest created the offering?
It can be. Firms must review private placements before selling them and supervise the advisors who recommend them. A firm that skipped that review may be liable for failing to supervise.
