The White Law Group continues to investigate the sale of a private debt offering in Erickson Retirement Communities by brokerage firms who may have failed to perform adequate due diligence when recommending these products to clients.
As reported in an earlier post here, the Erickson Retirement Communities filed for bankruptcy reorganization in 2009. Erickson listed $2.7 billion in assets, according to bankruptcy reports, and has facilities throughout the US. Investors in Sedgebrook Assisted Living Complex, a Chicago based Erickson Retirement Community, were paid only $3.5 million of the $95 million total debt according to reports.
According to a recent article in the Chicago Tribune, a number of investor have filed a claim with the Financial Industry Regulatory Authority (FINRA) against brokerage firm, B.C. Ziegler & Co., to recover their losses. According to the article, the allegations againstB.C. Ziegler include breach of fiduciary duty, failure to supervise, and selling to unaccredited investors.
The article says that one investor was told that the Erickson investment “would provide 11% returns” and “they were assured by their broker that it was a safe investment.” Given the performance of the Erickson investment, it appears that such statements (if true) were not accurate.
Upon information and belief, many investor were unaware of the risks or mislead by the brokerage firm that sold Erickson investments. Brokerage firms have a fiduciary duty to their clients and are required to perform adequate due diligence prior to making investment recommendations to determine if an investment is appropriate given the clients age, risk tolerance, and financial objectives. In addition, brokerage firms are required to disclose all the risks of a given investment. If a firm failed to appropriately recommend an investment, investors may be able to recover their losses though a FINRA arbitration claim.
If you invested in Erickson Retirement Communities and would like to speak to a securities attorney about your litigation options, please call The White Law Group at 312-238-9650 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 Boca Raton, Florida.
For more information on The White Law Group and the firm’s securities fraud practice visit http://www.whitesecuritieslaw.