The Securities & Exchange Commission (SEC) has permanently barred California-based real estate investor Scott Landress from the securities industry and fined him $1.25 million for improperly withdrawing a fee of more than $20 million from two U.K.-focused private equity funds.
Landress directed his company, SLRA Inc. to take money from Liquid Realty Partners III LP and Liquid Realty Partners III-A LP in 2014 as “payment” for several years of service. He then put the money into his personal account.
According to the SEC, private equity fund advisers have a duty to act in their clients’ best interest. In this case, Landress took money that he had no rightful claim to. The money was to be used for a real estate project in the U.K., and has since been returned.
The two aforementioned funds started in 2006 and then lost money during the real estate crisis. Between 2009 and 2011, Landress asked for additional compensation from the funds’ limited partners but was denied. In 2014, he took the money and told partners it was for fees owed to a Liquid Realty affiliate for services rendered between 2006 and 2013. The funds and their partners were not aware of the existence of the alleged fees owed for services rendered.
The limited partners, in this case, included university endowments and pension funds who had invested upwards of $700 million toward the two funds, which had been investing in trusts and had interests in 197 retail, office and industrial properties.
Did you invest with Scott Landress or Liquid Realty Partners?
Even though Landress returned the money taken, the SEC still permanently barred him from ever operating in the securities industry again. As a reminder to anyone looking to invest, always check on your broker’s history online. If you believe your broker might have been disciplined or barred from investing, you may have certain legal rights that require your immediate attention.
Call a Los Angeles Securities Fraud Attorney Today
Contact an experienced Los Angeles securities attorney today for a consultation to discuss your rights and options.