The White Law Group continues to investigate the sale of Commonwealth Income & Growth Funds I-VIII by broker-dealers. Specifically, the firm is investigating whether brokerage firms performed adequate due diligence on these offerings before marketing and selling them to their clients.
According to their website, Commonwealth Capital Corp. ("CCC") is an equipment leasing and financial services company that was founded in 1978 and is located in Pennsylvania. Commonwealth specializes primarily in information technology, medical technology, and telecommunications equipment and "offers one of the only Information Technology specialized public Alternative Investment funds in the U.S."
According to the form S1 filed with the Securities and Exchange Commission, Commonwealth Income & Growth Fund II "expects that there will be no public or private market for the Units; due to this lack of liquidity, Limited Partners must be prepared to hold their Units for the life of the Partnership and Limited Partners will be able to sell their Units, if at all, only at a substantial discount." This generally makes these types of investments ill suited for retired individuals or individuals with limited income that may need access to their money for unexpected medical or living expenses.
Such investments are also extremely high commission products. For example, Commonwealth Income & Growth Fund V, according to their registration from filed with the Securities and Exchange Commissions "will pay Commonwealth Capital Securities Corp., as the dealer manager, an underwriting commission of up to 10.0% of the capital contributions."
Broker-dealers have a legal obligation to act in the best interest of their clients and have to demonstrate adequate due diligence on an investment before recommending the investment to a client. Furthermore, recommendations should be consistent with an individual's age, risk tolerance, financial objectives, and investment knowledge.
Broker-dealers that have not done their fiduciary duty or adequately disclose the risks when selling investments may be held liable for damages lost through FINRA arbitration claims.
For more information on The White Law Group's investigation, visit http://www.whitesecuritieslaw.com/blog.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For a free consultation with a securities attorney, call 312-238-9650.
For more information on The White Law Group, visit http://whitesecuritieslaw.com
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.