So this is what's going on grant and his funds are being sued not by one not by two but by four, different, class. Action, lawyers. Class, action, law firms. For alleged, securities. Fraud. In this video we're going to explore. What this means for grant cardone. And his investors. And to get started, all you need to do, is smash. The like. Button. All right it's time to think like a marketer. Who thinks. Like a consumer. And this. Is the perfect situation. Of what i'm talking about because. These law firms are accusing, grant cardone, and his funds of making. False, and misleading, statements. And omitting, material, facts in connection. With public offerings. For, two. Of cardone. Capital, funds totaling 100 million dollars. Legal disclaimer, time, everything, i say in this video is alleged. And. There is no. Facts. Or proven. Facts, at this time, everything in the complaints, are alleged, right so, everything i'm going to be talking about, i want to stipulate, these are my opinions. And i'm, creating these opinions, or making these opinions. From the alleged. Uh, from the allegations. From the alleged allegations, is that right yeah from the alleged allegations. And the complaints. So again. Take everything i'm saying today with a grain of salt, because. Nothing. Is proven. And. Everything, is subject to change. As. These lawsuits, proceed, moving forward. So first of all let's talk, background, information. What is going on what is grant cardone, and cardone, capital, all about. Grant. As you probably know, is a real estate investor, that's just one of the few things that he does, he's also. A best-selling, author, i happen to really like this book. Um, new york times best-selling, author, uh he has cardone, university. But one of the things that he loves, is real estate. And so, uh he went from, doing. Uh what he called it single. Home, investing. To then he started doing multi-family. Home investing, which is apartment, complexes. And. And, from that he created. What's called what he calls, the cardone, capital. Fund, or funds and he's got a bunch of them i think one through five or one through six. And so what these. Funds, are they're kind of like a quasi, public offering. And so, they go out, and they raise, money. And then with this money they go out and buy real estate. And so the entire, venture, is backed, by real estate. Got it all right so.
What The complaints are alleging, is that in two of, grant cardone's, funds. That he misled. The public. Specifically. That he want he went on to social, media. And started making. These grandiose. Claims, that he could bring, people. Uh two times or three times, return on their investment. And as a bare minimum. Bring investors. A 15. Return, on their money. Now in the complaints. They're saying hey there's no factual basis, for this. And therefore. These. Assertions. Are. False and misleading. And therefore, they are a violation, of securities, law and therefore. Uh cardone. Uh capital, and grant cardone. Has. Hurt. The investors. Because, uh they are being misled they're being duped, because of all this hype. Uh possibility. Of return, right, so, that is in a nutshell, what's happening. So one of the, allegations. In the complaint. Is that grant started targeting. Non-accredited. Investors. And so before we. Continue. Let's, look at what a credited, investor is versus a non-accredited. Investor. So a accredited, investor. Is a u.s, term. Used by the, securities, and exchange, commission, the sec. And, basically, what they say is that, it refers to individuals, that are, naturally. High net worth, possibly, a bill gates, or a mark cuban. By the way speaking of mark cuban mark cuban was also involved in an sec. Type civil. Um. Litigation. And he prevailed, in that, so i'm very curious to see what's going to happen with grant, in this particular, case. Anyway moving on, so an accredited, investor, somebody who has got a certain level of sophistication. High net worth, doesn't need as much protection. Because he's been around the block or she's been around the block a few times, and kind of knows what they're doing plus because of their high net worth, and their sophistication. They they might have a team of advisors. To help them. Make, these choices. Right to make. The best choices, in their investment. Portfolio. So therefore again they don't need as much protection. As opposed to let's say a non-accredited. Investor. The average, joe, you and me. We are uh, we're not sophisticated. Enough and because we're not sophisticated, enough and. Our net worth. Is, under a billion dollars. We have two strikes against us a we may not know what we're doing and b, we can't afford to lose our money. So the security, exchange commission, has a certain. Uh has a set of different rules. For going, for. Solicitating. Non-accredited. Investors. Non-sophisticated. Investors. Versus, accredited, investors. Does that make sense. So whether you're a. Accredited, investor, a non-accredited. Investor, the nice thing is is that you can still, crush the like button, so go ahead and crush the like button now, and the algorithm, will thank you for that. All right let's go on, what uh. You're allowed to do, when you are raising, funds. Is you are allowed to what's called test the waters. And you're allowed to test the water by doing this thing called test the water communications. It can be as simple as saying hey. Bert. I'm gonna i'm gonna be putting a fund together, to buy real estate would you be interested in something like that. That's a pretty straightforward. Test the water communications. And so, what the test the water communication, is all about. Uh it's just a way for companies. And people who are raising, capital. To confidentially. Sort of speak. Gauge, the market. For their idea. Bottom line is. That. By testing the water, you can find out is there a market, for your product. For. The thing that you want to raise money for so if if you start getting a lot of negative feedback, like people are saying man i don't want to invest. In a third covered sink. Then you're not going to take the time and trouble, to. File.
The Necessary, paperwork, with the sec, so now you can do it, a more generalized. Public, offering does that make sense. All right so instead of me kind of, telling you all these allegations. Let's just go to the complaint, and let me show you, what they're alleging. And then, and then we'll wrap up. All right so this is just one of the complaints, and by the way as, i said earlier. If you want to copy the complaint just go to the comment section, put in there that you want to copy the complaint, or complaint, or whatever and i'll get you the link and you can check it out yourself. So they really are hammering. Uh grant, and cardone, capital. For using. Their. Social media. As, advertising. Tools. And, not, using, the correct, language, or disclaimer. And so one of the allegations. Here is in one of the videos september, 17, 2019. Cardone. Advertised. That if someone, invested. 220. Grand, in car in cardone, capital, funds. This will result. In a. Sixty 660. Dollar position, in the fun, in other words he's going to three x, your investment. That's. A pretty, bold. Move. Uh or a pretty bold statement, right, all right so this is where it starts to uh what it called the rubber starts to meet the road kind of a thing, so here. Uh. He claims, that investing again the 220. 000, would allow investors, to earn. 12 to 15, 000, a year in distribution, that's kind of like dividend, you're making money off your money. And so, in this complaint, it says that this, in fact this statement, was. Materially. False. And misleading, because there was no, reasonable, basis. For this representation. To investors. And. Distributions. Have in fact, been much lower, than, these, amounts. So they're actually looking, at. His past, performance. To predict. Future. Performance. And they're saying wait a minute, how did you make that conclusion. All right moving on so here, we have another one where cardone, told, potential, investors, that he expected. He expected, to sell. Underlying, real estate property in five to seven years which is very common in these. Real estate. Uh. Funds, right because, real estate goes up, uh, in, valuation, just like stocks do and so, it takes five to seven to ten years to make these things happen. Um at which point he expected, that the 220. Grand. Invested would be again be worth 660. 000, plus. Your, cash flow. These statements again what they're saying are false and misleading, because cardone, has no reasonable. Basis, for claiming, that a given property will triple in value in five to seven years. Now. Looking at the situation, today. This is clearly, something that, uh cardone. Um, grant, and cardone, capital, may be concerned with why because, right now. Real estates. Are, kind of in a flux situation, here we are october. 1st. October, 1st of 2020. And. There's a lot of speculation, where the real estate's going to go up we're going to go down, and the nice thing about it though is that.
Cardone, Capital, and grant, are investing, in multi-family. Dwellings, meaning apartment, complexes. Most people are probably going to stay in their rentals, for the next, i don't know, 6 to 12 months there should be a cushion there, and who knows what the real estate market, will do, and that's precisely. What they're alleging, in this particular, allegation, that, you know there's no basis for him to claiming that hey this is going to triple in five to seven years. In five years from now, the real estate market. Could have crashed. Again. Of course in seven years. It could be back up to, even higher so again they're saying hey this is no factual, basis. And i guess, uh they have a clip. Of, him and this might be a youtube. Channel. Um. Oh no this looks again, that it's a. Cardone, capital. Instagram. And again, you see the 220. 000. There the 660. 000. There. Uh twelve to fifteen thousand dollars, uh is right there, and then five to seven years so yeah, right there. Um, anyway so this is what has got, grant cardone, and cardone, capital, in so much. Alleged. Hot water, right. Uh the other thing is. They're harping on the fact that, uh cardone, capital and grant are talking about. The safety, of their money, right, so cardone capital further represented to potential, investors. That their capital. Would be safe, in cardone, capital, funds, because. Cardone, capital is built on real estate. On real assets i'm sorry real assets which are already, established, and stable, in nature. Without, sufficient, warning, investors, of, the risk, of investing in real estate properties. In question. Again, real estate goes up real estate goes down just like. You know stocks do just like any investment, you're always at risk. All right so i'm not going to trouble you by continuing, to read all this, um, it's more or less the same, allegations. Repeated, over and over again. And if you want a copy, of this, uh i'll be glad to send it to you via pdf, just leave me a comment. Uh that you want to copy and i'll be glad to send it to you. It's really, good, reading. Just. As a precautionary. Tale. Not to beat up on grant cardone. And, i want to talk i want to say this because i don't believe grant cardone, is in any way trying to hook wink anybody, right. You know grant cardone. Uh. Is, what i call he's using some puffery, here, which when you're dealing with investors. When you're dealing with non-accredited. Investors. It's just not. It's not good. And so it could. Possibly. Lead. To uh. You know to trouble. So, and that's exactly. What's going on right. Again. I, personally, like grant cardone.
And I. Do believe, that he's got good intentions. And i believe, that. All of the stuff will be worked out. And. And it's gonna cost grant cardone, some money, bottom line. All right so let's see um. Let me look at my notes real quick. Because there's just a lot to uh. To talk about there. All right so, let's wrap this up so what does this mean, to grant cardone. And cardone, capital. It means that grant, and his funds are about to be crushed. In two ways. All right. And. Number, one. You're about to, quadruple. Your legal expenses. So grant cardone, he's got a decent sized company and he probably has a legal. Uh attorney, maybe two attorneys on staff maybe it's a a, small legal department, on staff because he deals with a lot of stuff he's a wheeler dealer, so he probably has, a small legal team on staff. Great. However. Class action lawsuits, are a specialty. Unto themselves. Securities. Law is a specialty. Unto itself. A general. Practitioner. Which is what most corporations. Have. Are not going to be suited for this so what's going to happen is they're going to have to go out and get a law firm. And not just a law firm, that specializes. With, securities, exchange, but with class actions. But, a big enough law firm. That can handle. One, two three four possibly, five possibly, six. Lawsuits, at the same time they're gonna probably have to consolidate. These lawsuits, which is what i see the first. Thing that they're gonna move, the court to do. And, then. On top of your. Expenses. Accelerating. Because. Even, if they settle this in a year it could cost grant and his team a couple of million dollars. So besides. Accelerating, your expenses. As this is made public. Well you're going to have less investors. Going, to invest, in your funds. Uh, you might even hurt your other businesses, so grant, as i mentioned earlier the best-selling, author he's a motivational. Speaker. He's got cardone, university. Uh which goes around. And has training, uh, videos, and training programs. For people around the country. And. All of these things i suspect, are going to take a hit matter of fact as i said earlier this is october, 1st 2020. They've already taken a hit the pandemic, is slowing all businesses, down. So. Where grant cardone. Might have been, uh. Doing several motivational. Events, a year. He's probably not done that many this year. And so, again. This is coming at the worst time, sales, are slowing down, significantly. Expenses, are accelerating. Significant. This, is. Between. This is you know rock, hard place, you right here right it's the worst type of situation, that you want to be in, all right, so what do i think is going to happen, well what i think is going to happen is that somebody's going to come by and smash. That like button please do that now i appreciate it very much but seriously this is what's going to happen.
Uh In a situation, like this. As i mentioned earlier you're forced to spend millions of dollars defending, these class action lawsuits. And if you've ever been involved in a lawsuit, lawsuits, can take, a. Uh we call a life of their own. And. Sometimes. In fact most of the time it's just better to hurry up and come to a settlement. However, because this is a securities. Uh. Uh what do you call it uh. A securities. Type lawsuit. I expect, that the sec, is gonna get involved. Which is again is going to prolong. Or protract. The uh. The situation. Right so he may settle. With these law firms. But now the sec, is going to take him to task and as i mentioned earlier that doesn't necessarily, mean anything. But. In this, complaint. One of the allegations, that i uh forgot to bring about, is that the sec, had told, grant. That some of these, things that he was saying in his social media. Were unacceptable. And they're going to take him to task for that. Not only is that, is not only is that going to hurt him. Possibly, could hurt him with the civil lawsuit, but it's possibly, going to hurt him when he starts dealing with the sec. So um. Anyway so as i mentioned earlier, he's going to accelerate. His expenses. He's uh his sales are going to decelerate. Uh, and, again, the third thing i think the ssc, is going to get involved. I think also. In about 12 to 24 months, all of this will be settled out of court it's really going to be the cheapest. Fastest, thing, for grant to do, for, cardone, capital to do and let me tell you why because whether you're right or wrong. These. Lawsuits, can become so expensive, and like i said earlier they take a life of their own, that it distracts, you, from the stuff that you're really good at. So instead of you spending. Uh all your all your valuable, time, raising. More capital, getting more investors, selling more training programs doing more more motivational, speaking. Maybe writing another book or two, your your energy and your time, can be distracted, with these lawsuits. So you're better off cutting a check now. And just, moving on as quickly as possible. The other thing to take away from this is that, be careful. What you post on social media. Puffery. Can bite you in the butt. Making outrageous, claims can bite you in the butt. Even if your intentions, are good, what you post on social media. Can come back to bite you on the butt. Anyway. Thank you so much for watching this video, let me know what you think. Uh is grant cardone a good guy is he a bad guy, do you think he's trying to hook with people. Is, uh cardone, capital, doomed at this point. What do you think about these, lawyers, that are just jumping all over them like i said at this point, um, it is uh what 5 p.m, here in phoenix. There's four lawsuits, or four different. Law firms. I think that you're gonna find another two or three law firms they're gonna jump on here, uh, you know, many, many, uh uh what do you call it uh, analogies, have been made about. Uh, lawyers, being like sharks. Right now. They smell blood. And that's blood is coming from grant cardone, and cardone, capital, so they're going to jump on the gravy, train or, the blood train or whatever. Um, anyway if you want a copy of the complaint. Leave me a comment saying. A copy of the complaint or complaint. And, please if you're not a member already hit the subscribe, button. And, also. Let me know what kind of videos you want what i hope to do with this channel is i want to bring the information, about. Business. About marketing, your business. About. Uh managing, money, and growing, your money so you know really i want to focus on those things because those are the most important things. If you have money. And, you have more importantly, the money, making you money. Then, you can actually have. Peace of mind you can have what they call. A uh, you know, coupon. Type of income, or mailbox. Income or passive, income, and that's really, what a lot of us hope to do.
And I've been fortunate, enough to be there i've done that a couple of times, and i, would like to impart some of my wisdom. Not only, uh, help you avoid, some of the mistakes that i've made and i've made, a lot of mistakes, and even created, some new ones. Um. And i've, just about, done every stupid thing that you can think of so i can definitely help you avoid some big mistakes. And then also, just help you, get from where you want, to, or from where you're at to where you want to be so let me know what kind of videos. You would like to see more of. And again thank you so much please subscribe. Like. And. Share this with anybody, that you think might be able to help. Remember my friends you. Were created to. Succeed.
2020-10-07