Many investors have suffered substantial losses in a Lease Equity Appreciation Fund (LEAF) investment. The funds include Lease Equity Appreciation Fund I and II, as well as LEAF Equipment Leasing Fund III and LEAF Equipment Finance Fund 4. Currently, The White Law Group is investigating the liability that broker dealers may have for selling these funds to some investors.
According to regulatory filings with the SEC, LEAF I is a limited partnership formed in 2002. “Through its offering termination date of August 15, 2004, the Fund raised $17.1 million by selling 171,746 of its limited partner units.” In August 2009, LEAF I entered into a liquidation period. By July 2012, LEAF I ceased making cash distributions to partners.Unfortunately for investors, “Future cash distributions to the partners are not expected due to the relatively small portfolio size and fixed administrative partnership maintenance costs.”
Limited partnerships, especially leasing funds, are complex high risk products that are typically intended for sophisticated and institutional investors. Unfortunately some brokers downplay the risk and mislead investors into thinking these are “safe” investments. Limited partnerships are arguably unsuitable for most investors, especially conservative investors.
Compared to exchange traded funds, limited partnerships offer extremely high sales commission. Often this can provide some brokers with enough incentive to overlook suitability requirements when selling partnership units. Broker dealers that sold LEAF I, earned a sales commission of 7% on every unit sold, according to the SEC files.
Broker dealers that overlook the Financial Industry Regulatory Authority’s suitability requirements or mislead investors regarding risks can be liable for investment losses through FINRA arbitration.
To determine whether you may be able to recover investment losses incurred as a result of your purchase of a LEAF fund, please contact The White Law Group at 312-238-9650 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 Vero Beach Florida.
For more information on The White Law Group, visit www.WhiteSecuritiesLaw.com.