Financial Advisors at GPS Capital Management Allegedly Recommended a $200,000 Investment in Aequitas Notes for the Retirement Funds of an 85 Year Old.

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The Law Offices Of Jeffrey A. Feldman Currently Represents the Son of the Now Deceased Retiree (“Claimant”) In A FINRA Arbitration Claim Against GPS Capital Management (“GPS”), and Against Daniel Wu and Dennis Lin Chen, Control Persons at GPS (collectively “Respondents”). According To Allegations In The FINRA Arbitration Claim (FINRA No. 16-02647), GPS Recommended Investing Much of the Claimant’s Fathers’ Retirement Funds into Aequitas Notes.

The Claimant had opened a joint account with his elderly father, so that the Claimant could manage his father’s funds, according to allegations in the claim filed with FINRA. The Claimant sought advice about where to invest his father’s funds from GPS, according to the FINRA claim. Per allegations in the FINRA claim, the Claimant made it clear to Respondents that the Aequitas Notes investment was for his father, an 85 year old retiree. An Advisor at GPS then recommended that Claimant put the funds into Aequitas Notes, according to the FINRA claim.

Per allegations in the FINRA claim, Aequitas Notes (“ACF”) were a private promissory note investment, which did not meet customer specific suitability standards for the Claimant or his father. With much of the funds raised from the ACF notes, according to allegations in the FINRA claim, Aequitas had been purchasing loans made to Corinthian College students. The federal government had filed a suit against Corinthian Colleges, Inc. (“Corinthian”) in 2014, in the U.S. District Court, Northern District of Illinois, Eastern Division (Consumer Financial Protection Bureau v. Corinthian Colleges et al.; Case No. 1:14-cv-07194). Respondents failed to disclose the federal suit to the Claimant before he made the investment in Aequitas Notes, as alleged in the claim filed with FINRA. Per allegations in the FINRA claim, the federal government litigation with Corinthian significantly endangered Aequitas’ ability to collect on the Corinthian loans it was purchasing with the funds raised from investors like the Claimant. Had the Claimant been given this information, according to the FINRA claim, he never would have invested in the ACF notes. This information also likely made these ACF notes unsuitable for any investors after the September 2014 federal litigation was filed against Corinthian, per allegations in the arbitration claim filed with FINRA. More information about The Law Offices Of Jeffrey A. Feldman can be found at: http://www.jeffreyfeldman.com.

Aequitas suspended interest payments and redemptions on all of its investment products, including the ACF Notes, in January, 2016, according to the FINRA claim. The Securities and Exchange Commission, on March 10, 2016, filed a complaint in the U.S. District Court of Oregon, Portland Division, against Aequitas entities and three of its key officers (Securities and Exchange Commission v. Aequitas Management, LLC, et al., Case 3:16-cv-00438-PK). The numerous Aequitas entities are in receivership, and a plan has been implemented to liquidate any assets and pay creditors, according to the claim filed with FINRA. According to Mr. Feldman “It is too early to tell if there will be any assets for Main Street investors like the Claimant.”

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Jeffrey Feldman
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