Investor Sues Cardone Capital for Securities Fraud

On September 16, 2020, Cardone Capital, LLC and Grant Cardone were sued for securities fraud by an investor.  The securities class action lawsuit was filed in the Central District of California and alleges that Cardone made false and misleading statements in connection with various investment funds issued through Cardone Capital.

Cardone Capital purports to provide real estate investment opportunities to “everyday investors” through real estate crowdfunding. Cardone Capital’s equity funds were formed to purportedly acquire interests in income-earning real estate. The class action lawsuit against Cardone Capital alleges Cardone misrepresented important aspects of his investment program. For example, the complaint alleges that Cardone Capital repeatedly and falsely represented to investors in its social media posts that its funds generated a 15% internal rate of return.  When the Securities and Exchange Commission learned about these statements, it sent Cardone a letter stating: “We note… your strategy to pay a monthly distribution to investors that will result in a return of approximately 15% annualized return on investment. We further note you do not appear to have a basis for such a return. Please revise to remove this disclosure throughout the offering statement.” According to the complaint, Cardone continued to quote the 15% figure even after the SEC demanded that he stop.

In addition to these claims, the lawsuit also details other allegedly false statements made by Cardone.  These statements included, according to the complaint, promises that the investor’s principal would be protected and misleading statements about the number of monthly distributions.   It is unlawful to make material misstatements or omissions in connection with the sale of securities. 

If you or someone you know invested in Cardone Capital and you are concerned with your investments, please do not hesitate to contact our law office at (877) 238-4175 or by email at for a free and confidential consultation.

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