iCap Northwest Opportunity Fund, LLC Investigation | Goodman & Nekvasil P.A., May Recover Investor Losses
CEO of iCap Northwest Opportunity Fund, LLC Suspends Investor Payments
In an March 15, 2023 update the CEO told investors, “It appears that interest rates are on track to continue rising which means things will likely worsen in the near term.”
The CEO went on to say, “The current situation has impacted the real estate portfolio that iCap manages and therefore our ability to return capital to investors under the time frame originally prescribed in our disclosure documents. We are writing to inform you that at this time we are not able to continue making monthly interest payments.”
iCap Northwest Opportunity Fund, LLC Regulatory Filing
The company filed a Form D to raise capital from investors in 2015, with the offering iCap Northwest Opportunity Fund, LLC.
The total offering amount was $50,000,000. An estimated 10% was paid in sales commissions, according to the Form D.
Private placements investments raise capital through the sale of equity or debt securities. These securities are exempt from registering their securities with the SEC.
iCap Northwest Opportunity Fund, LLC and the Risks of Private Placements
Many investors are not fully aware of the problems and risks associated with illiquid, high risk, private placements when they purchase them.
Investments are often riskier and more complicated than traditional investments. These funds are only suitable for high net worth, sophisticated investors.
Liquidity Issues and High Sales Commissions
Private placements can face several liquidity issues due to their unique characteristics and structure. iCap has repeatedly extended the maturity date of the debenture.
Another problem often associated with private placements is the high sales commissions brokers typically earn for selling them. Brokers have an obligation to make investment recommendations that are consistent with their clients risk tolerance, net worth, investment objectives and experience in the market.
Unfortunately, in many cases, the high sales commission may influence unsuitable investment recommendations.
Broker Due Diligence
Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so may be held responsible for any losses in a FINRA arbitration claim.
If you believe that the investments in iCap Northwest Opportunity Fund, LLC may have been unsuitable or otherwise improper for you, we would like to discuss the possibility of your retaining our firm to represent you in an arbitration action.
There is no charge for an evaluation of your case. We handle our cases on a contingency fee basis. If we don’t recover money for you, we charge no attorney’s fee.
Goodman & Nekvasil, P.A. has recovered more than $400 million on behalf of victimized investors. If you lost money on investments in unsuitable investments and would like your case evaluated by a securities attorney, please contact us.