KKBS Announces Filing of Class Action Against Investment Adviser
Krause, Kalfayan, Benink & Slavens, LLP announces filing of a class action lawsuit against Cornerstone Wealth Management, LLC, (“Cornerstone”) and others. Plaintiff, who was a client of Cornerstone, invested in a commercial mortgage fund, called Scripps Investment Mortgage Fund I, LLC (“Scripps Fund”) in 2006. Plaintiff alleges that Cornerstone sold him the Scripps Fund knowing that it invested in risky second, third and fourth trust deeds and high-risk construction loans, when the offering materials represented that the fund invested solely in first trust deeds on real property.
Plaintiff contends that Cornerstone, through its founder Chris Meacham, actively sought to conceal its own knowledge of the fund’s misrepresentations in order to avoid liability to its clients. He claims that Cornerstone falsely reported to its clients that it learned for the first time in 2008 that the Scripps Fund invested in second trust deeds. He further asserts that Cornerstone went so far as to file a court case against Scripps, purportedly on behalf of investors, in which it claimed that it was misled by Scripps. According to the class action complaint, the purpose of the lawsuit against Scripps was to appease angry clients and prevent any client from learning about Cornerstone’s own culpability.
Plaintiff seeks class certification and claims damages on behalf of the class in the amount of $5.8 million.
For information, please contact partner Vincent D. Slavens, 619-232-0331/ firstname.lastname@example.org