Dimond Kaplan & Rothstein, P.A. is investigating sales of the Hennessey Financial Monthly Income Fund, LP n/k/a Capital Solutions (the “Hennessey Fund” or “Capital Solutions”). Capital Solutions was a purported mezzanine real estate lender. Stockbrokers Andrew Rosenberg and Stuart Horowitz sold investments in Capital Solutions to customers through Andrew Stuart Asset Management and the brokerage firm NFP Securities, Inc. in Coral Springs, Florida. We understand that the brokers may have represented to investors that Capital Solutions was a safe investment that paid annual returns of greater than 10%. We further understand that brokers Rosenberg and Horowitz made other misrepresentations to investors about the relative safety of Capital Solutions. In truth, Capital Solutions appears to have been engaging in securities fraud.
In September 2010, the Securities and Exchange Commission (“SEC”) sued Capital Solutions and others involved in the fund for securities fraud.
According to the SEC, from January 2005 to August 2009, Capital Solutions raised approximately $74 million from approximately 450 investors from across the United States.
Brokerage firms such as NFP may be held liable for their customers investment losses for their failure to perform adequate due diligence on Capital Solutions before recommending and selling the investments to customers. Moreover, to the extent NFP or other brokerage firms misrepresented Capital Solutions as a safe investment, they can further be held liable for such misrepresentations.
