Dimond Kaplan & Rothstein, P.A. is investigating securities brokerage firm Herbert J. Sims & Co. Inc. (“HJ Sims”), for its sales of certain SEC Regulation Reg D (“Reg D”) securities. HJ Sims sold at least 84 different Reg D private securities offerings during the last decade.
A recent study regarding HJ Sims’ sales of Reg D securities to investors found that they were placed in a conflict of interest. Specifically, the study states that HJ Sims executives made large investments in the securities and they would profit handsomely if the securities performed well. But, HJ Sims allegedly would shift the losses to customers if the securities did not perform well. This shifting of risk to customers could have caused HJ executives to make riskier investments because they could simply shift the risk to HJ Sims’ customers.
At least 10 of the Reg D securities offerings have failed to make their interest payments and/or principal payments. Moreover, HJ Sims may have reported values to customers that were not accurate. Those Reg D offerings are as follows:
Cypress Point Funding LLC
Gryphon Finance I, LLC
Hawkeye Village Finance I, LLC
HJSI Athena Portfolio Finance LLC
Madison Funding I, LLC
Poet’s Walk Funding I, LLC
Riverchase Funding LLC
Sims Cathcart Funding LLC
Tuscan Isle ChampionsGate Holdings LLC
Tuscan Isle Holdings 1, LLC
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