FINRA Arbitration Panel Awards Syndicated Conservation Easement Investors $509,000 In Damages Against The Strategic Financial Alliance

A FINRA arbitration panel awarded investors $509,000 in damages against The Strategic Financial Alliance over the unsuitable recommendation of syndicated conservation easements. Law firm Shepherd Smith Edwards and Kantas is actively investigating brokerage firms that sold these high-risk tax shelters to retail clients.

A family of investors was awarded $509,000 by a FINRA arbitration panel in their broker fraud case against The Strategic Financial Alliance. The Claimants accused the broker-dealer of unsuitably recommended syndicated conservation land easements (SCEs) that they said led to significant investment losses, along with other portfolio losses involving whole life insurance policies and real estate investment trusts (REITs).

According to InvestmentNews, this may be the first FINRA arbitration award against a brokerage firm over SCEs. There reportedly also have been settlements reached between brokerage firms and investors over the unsuitable recommendation of these tax land shelter deals.

How Do Investors Get Involved in Syndicated Conservation Land Easements and What Are The Risks?

• This type of investment involves private investors pooling funds together to purchase real estate that will supposedly protect land by limiting development. The easement is donated to a land trust or charity so as to garner huge charitable tax deductions. Investors are usually able to “buy in” with the help of a broker, wealth manager or tax promoter.
• The Internal Revenue Service (IRS) considers syndicated conservation land easements to be abusive tax shelters.
• SCEs are usually sold as Regulation D private placement offerings. This makes them unsuitable for retail investors and conservative seniors and retirees.
• Appraisers are usually hired to inflate appraisals based on speculative, maximum development potential.
• There are concerns that often, syndicated conservation land easements are more about tax benefits than conservation efforts.
• While SCE investors can use a pass-through tax deduction that can be valued at 2.5 – 4 times their original investment, If a syndicated conservation easement is audited by the government, the charitable deduction might be disallowed and investors could end up paying heavy penalties and interest. This can include an up to 40% gross valuation misstatement penalty or an up to 75% civil fraud penalty. A syndicated conservation easement investor may even have to pay back taxes and interest. These are just some of the losses that can occur.

Shepherd Smith Edwards and Kantas Conservation Easement Recovery Lawyers Are Investigating Brokers That Sold Syndicated Conservation Easements To Investors

If you are an investor who suffered losses in a syndicated conservation easement that was sold to you by your financial advisor, our broker fraud law firm wants to talk to you. Brokerage firms should know better than to sell these Reg D offerings to investors. Yet SCEs are attractive to brokerage firms because of the high commissions they can earn. Unfortunately many investors have no idea of the kind of losses and legal exposures that can result by placing their money in an SCE.

Shepherd Smith Edwards and Kantas Conservation Easement Recovery Lawyers (investorlawyers.com) are investigating the brokerage firms that sell these abusive tax shelters to customers. This includes our active probe into DFPB Investments over its sale of EcoVest Capital Syndicated Conservation Easements to customers.

Talk To Us About Your Syndicated Conservation Easement Losses Today

Our skilled syndicated conservation easement recovery lawyers can help you explore your legal options as we determine whether you have grounds for a claim against your broker-dealer. Call (800) 259-9010 or contact us online.