Investors in Atel Capital Equipment Fund IX (Atel) may have valid arbitration claims against stockbrokers or investment advisors if advisors’ recommendations of Atel lacked a reasonable basis. Such recommendations by broker-dealers and advisors may be unsuitable, depending on the individual characteristics of investors and whether the broker had a reasonable basis for the recommendation.
Equipment leasing funds, like Atel, allow investors to pool their capital to buy equipment in order to lease the equipment to businesses. These types of investments offer greater risk than traditional stocks and are usually meant for sophisticated investors. Some of the risks investors might encounter are lack of liquidity, price fluctuations due to changes in demand for the leased equipment, and value of the equipment once the lease ends. In addition, if the fund is not able to meet its loan obligations the equipment can be used as collateral. These types of investments are complex and not suited for investors with a low risk tolerance.
Furthermore, some leasing funds are expressly intended to provide tax deferral for certain investors, and may be unsuitable for investors who do not have a need for the tax deferral feature.
When a broker recommends that a client purchase or sell a security, the broker must have a reasonable basis for believing that the recommendation is suitable for the investor. In making this assessment, a broker must consider the investors income and net worth, investment objectives, risk tolerance, and other security holdings.
If you believe you have been the victim of stockbroker misconduct, you may wish to consult an attorney to find out more about your legal rights and options. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or firstname.lastname@example.org for a no-cost, confidential consultation.