The Core of the Practice
Non-traded REITs, preferred shares of leveraged partnerships, private placements, structured notes, income funds. Complex and illiquid alternatives are the core of my caseload, and this page explains the pattern behind almost every one of those cases, product by product.
The Core of the Practice
Complex and illiquid alternatives are the core of my caseload. This page explains the pattern behind almost every one of those cases, product by product.
The Core of the Practice
Complex and illiquid alternatives are the core of my caseload. This page explains the pattern, product by product.
Most of my cases begin the same way. A retiree needed more income than bonds and CDs were paying, and an advisor had a product that promised it. A non-traded REIT. A preferred share of a limited partnership. An interval fund, a private placement, a bond substitute with a reassuring monthly check. The commission on that product was many times what the advisor would earn on the boring alternative, and that is not a coincidence. It is the business model.
Two risks decide these cases, and they are precisely the two the client was never made to understand. First, the monthly payment is not a promise. The issuer can reduce it or stop it at any time, and when the underlying business strains, that is exactly what issuers do. A retiree who budgeted around that check learns the difference between yield and income the month it disappears. Second, the liquidity was never real. These products are illiquid, but they are sold as only partially illiquid because of a redemption program, and what the client is not told is that redemptions are subject to caps and conditions, and that the issuer can suspend or cancel the program entirely. The exit exists until the moment people need it. Then it closes, and it closes for everyone at once.
None of this is hidden from the professionals. The distribution risk and the redemption conditions are in the offering documents the advisor was obligated to understand and obligated to explain. Under Regulation Best Interest, a broker who recommends the product without weighing those risks against the client's need for income and access to principal has violated the care obligation. An investment adviser who does it has breached a fiduciary duty. I read these offering documents the way I read them at the SEC, and I read the account statements the way a CPA does, including whether the "income" being advertised was partly the client's own money coming back. When the payments stop and the exit closes, that paper trail is where the case is won.
The word "preferred" is doing dishonest work in these sales. To a retiree, it sounds like safety. In the capital structure of a leveraged real estate trust or partnership, it means something narrower: paid before the common shareholders, and after every lender and creditor. The dividend is not owed, it is declared, which means a board can suspend it at any time. Many issues are callable exactly when rates make them worth keeping, and the ones that trade at all trade thin.
These instruments are sold to income investors as bond substitutes, and they are not bonds. In one matter this firm tried to award, a single household held four different redeemable preferred issues, each pitched as safe income of about six percent, each carrying sales commissions and dealer fees that consumed ten to fifteen cents of every dollar before anything was invested, and one reserving the issuer's right to pay redemptions not in cash but in its own common stock, which was later delisted. Behind another sat a portfolio of junk-rated loans. None of that was in the pitch. All of it was in the offering documents.
Reading the issuer's balance sheet tells you what the client actually held, how much debt sat ahead of the "preferred" position, how the distributions were being funded, and how quickly the cushion was eroding. That is accountant's work, and it is where these cases are built.
The firm's most recent published arbitration award, tried by Jorge alone in 2025, involved exactly this pattern: an elderly couple's retirement savings concentrated in illiquid alternatives including REIT preferred shares that the firm's own statements designated hard-to-value. Read about it, and read the award itself, on the Results page.
Non-traded REITs are sold on two illusions. The first is the distribution, marketed as rental income when a portion of it is often the investor's own capital coming back, a fact disclosed in the filings and rarely in the sales pitch. The second is the share price on the statement, which is a sponsor's estimate, not a market, and which tends to hold steady right up until it does not.
When the redemption program closes and the distribution is cut, the investor discovers both illusions at once. And the newest offerings can be worse: in one matter, a startup hotel REIT sold shares on brochures bearing the logos of famous hotel brands, planned to spend up to a quarter of every dollar raised on commissions and expenses, never acquired a single property, and disclosed doubt about its ability to continue as a going concern within two years, all while the prospectuses said these products are suitable only for people who can afford to lose the investment entirely. The question in arbitration is why they were sold to people who plainly could not.
The firm's 2018 published award involved non-traded REITs sold to an elderly investor. The panel awarded damages, rescission, punitive damages, and sanctions. The award is public; it is cited and linked on the Results page.
Regulation D placements and pre-IPO private equity funds are the fastest-growing corner of this practice, and the sales pattern is familiar: exclusivity as the pitch, accreditation paperwork treated as a formality, and due diligence that consisted of reading the sponsor's own materials. The broker-dealer that sold the offering had an independent obligation to investigate it. In case after case, the file shows that obligation was the first casualty of the commission.
These are also the cases where inflated net worth figures and reused subscription documents surface, because the product cannot legally be sold to the client as the client actually is. The account forms become the evidence.
Private Placement Fraud and Reg D, in depth →Structured notes are sold as the best of both worlds: market upside with a buffer against loss. What the term sheet actually describes is a bundle of derivatives with capped gains, conditional protection that vanishes past a threshold, and, underneath everything, the unsecured credit risk of the issuing bank. Few retail buyers understand what they own, because the product is engineered not to be understood.
Complexity is not a defense for the seller. It is the seller's obligation. The more engineered the product, the higher the duty to understand and explain it, and the term sheet itself usually proves neither happened.
The collapse of GWG Holdings' L Bonds showed the whole pattern at national scale: a high-commission, illiquid income note sold to retirees as safe, paying distributions from new investor money, until it stopped paying anything at all. The firm maintains a dedicated page on GWG claims, and the same analysis applies to every alternative income note sold on a monthly check and a promise.
GWG L Bonds, in depth →These vehicles put the liquidity trap in the product's own name and sell it anyway. An interval fund repurchases shares only at set windows, in limited amounts, and only if the fund chooses not to gate. A non-traded BDC layers business-lending risk on top of the same restricted exit. Both are marketed on yield to investors whose one non-negotiable need was access to their money.
Related products, variable and indexed annuities among them, raise their own suitability and switching issues; the firm handles those separately. Variable Annuity Abuse and Switching →
Apollo Debt Solutions BDC: $2.4 Billion in Withdrawal Requests, 5% Honored →Every alternative investment case in this firm gets the same three readings. The offering documents are read the way an SEC enforcement attorney reads them, for what the seller was required to know and disclose. The supervisory file is read the way a bank compliance director reads it, for what the firm's own systems flagged and ignored. And the account statements are read the way a CPA reads them, for the concentration, the return of capital dressed as income, and the losses as they actually accrued. By the time a claim is filed, the paper trail has already made the argument. One detail repeats across these files: whatever the product, the pitch is nearly word for word the same. Safe. Secure income. Capital preserved. The products differ; the script does not, because the script is what sells.
Under Regulation Best Interest for brokers and the fiduciary duty for investment advisers, the violation is not merely a failure to explain. It is the recommendation itself. An advisor may not recommend a speculative or illiquid product to a client whose objectives it does not match, no matter what was disclosed and no matter what was signed. The standard requires a reasonable basis to believe the product is being recommended only to clients who can tolerate its risks, are willing to tolerate its risks, and for whom the potential benefits justify those risks. A retiree who needed income and access to principal fails every part of that test for these products. The recommendation should never have been made, and that, not the fine print, is what these cases are about.
Bring your account statements, or just describe what you were told. The consultation is free and confidential, in English or Spanish, and I will tell you honestly whether the recommendation was a violation and what recovery could look like. No recovery, no fee.
Case costs and expenses are payable from any recovery as provided in the written engagement agreement.
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