Beware of Norada Capital: Caveat Emptor My Fellow Small Investors !!!

[David Kanarek]

In 2023, I invested in some Norada Capital Management 7 year Promissory Notes and last week less than one year after signing the last note, I receive a "form" email addressed to "Valued Investor", dated June 20th, 2024 from Marco Santarelli, who signed the letter as CEO & founder, that interest payments were being suspended until further notice without any resumption date. In 2023 before I invested any funds, each and every time that I spoke with their representatives, I asked as my FIRST question if Norada Capital Management had ever missed any interest or principal payments, and was always told the same thing by their representatives, that Norada Capital Management had a perfect payment/reimbursement history.

One week later, after writing their current investors that they are suspending interest payments, they are still seeking new investors for investments but do not inform the new potential investors that they have suspended interest payments. (see attachment)

Before you invest, please feel free to contact me and I will be happy to furnish all of the documentation of this episode, but in the meantime don't trust anything that is not in writing and don't sign any document that allows them to stop paying the interest and/or principal that is owed for any reason.

As I am currently preparing a report for the BBB, the CFPB and the FCC, I would also ask if anyone else has had a similar experience; I feel like David vs. Goliath so please let's work together to see what can be done to have them resume interest payments. And, like me, please leave all the reviews you can on all the web sites you can find about your experience so that other small investors have this information about Marco Santarelli and Norada Capital Management. Thank you.

[James Hamling]

I am curious what people think it means when told an investment MAY or may not go to $0???? 

Serious question. 

Do you think that was more like an EULA on a cell phone, just some legal mumbo jumbo you had to sign through to get things done but didn't really believe was ever a "real" potential? 

Or did you really feel that could honestly happen? And if so, to what % of "ok, this could happen" did you hold? 

Because what I get out of these posts is there was an EXPECTATION that not only would things NOT go bust, but that the projected ideal returns WOULD absolutely happen, for sure. 

NOT judging, I am truly curious the mindset's of such persons. I want to understand. 

But if you respond in outlandish ranting crazy emotional stuff, oh-yeah, I will judge and maybe even ridicule a bit, lol. 

[David Kanarek]

So are you saying you have the right to express an insulting, overbearing, ignorant, ridiculous question, clearly meant to ridicule the people who have just been financially injured, and you don't think it deserves a response?  Unless you enjoy being seen as an uniformed, nasty, rude, pompous ***, the only possible explanation is that you are so self absorbed that you have no issue with harming perfect strangers to make yourself feel important. I can promise you that you are the only one believes that you imbecile. 

(And you were really afraid I was going to be insulting !!)

😂

By the way, there's also a chance (not 0%) that the asteroid apophis will strike the earth in 2029. Better sell everything and live in an underground bunker. 

[James Hamling]

Quote from @David Kanarek:

....By the way, there's also a chance (not 0%) that the asteroid apophis will strike the earth in 2029. Better sell everything and live in an underground bunker. 

Uh-huh.... Well, on that note, I gotta go wash my hair, or something..... 

[Jon P.]

I think it's safe to assume your capital is gone in failed business ventures. Sorry to be the bearer of bad news, but when you look at the facts of what money was invested in and how it was handled, it leaves little to hope for.

The only potential to get anything back is a potential SEC / FBI investigation to see if any fraud was at play where other assets of Norada is possibly garnished to pay back investors. I also think the first ones in line with an actual lawsuit will be the the first ones in line for judgements. That is how it works with judgements. Literally, first come first serve, assuming you are granted a judgement, of course. Sitting around waiting and hoping will get you no where.

Also, history seems to repeat itself. Not sure if anyone is aware of this, but Marco's partner and CFO, Ronald Fossum, was charged with fraud by the SEC fairly recently and barred from participating in any type of similar activity. Well, here we are again. I think the SEC would like to know about his participation with Norada and the current situation at hand. The most concerning piece here is that Norada is still actively raising money from their investors as if nothing is happening! At first I looked at this as possibly just a failed investment where millions of unaccredited investors lost money (still very bad for everyone involved), but after learning about the involvement of Ronald Fossum that has a convicted history of defrauding investors and the fact that Norada is still raising money from investors, my mind now goes immediately to possible Ponzi Scheme paying past investors current funds being raised. I can't help but think there is something more malicious here than just a bad investment by looking at the facts. Time will tell, but for anyone invested with Norada, you are best off filing a complaint with the SEC and seeking legal guidance sooner rather than later. Sorry to hear so many people got caught up in this mess. Seems like tens of millions of dollars were raised from unaccredited investors...

Here are some SEC links for a partner and CFO of Norada showing previous fraud history:

https://www.sec.gov/enforcement-litigation/litigation-releas...

https://www.sec.gov/files/litigation/complaints/2017/comp240...

Based on what has been uncovered so far with the partnership between Marco and Ronald Fossum who has already been guilty of defrauding investors and barred by the SEC from participating in activity like this, I would say, yeah, there is a high likelihood of fraud in this case. Not to mention that Norada still is advertising private investment opportunities paying 17%, etc. That has Ponzi written all over it. I've seen the SEC come in and shut down bad operators immediately as a risk to the public when they continue to raise money like this. I think the SEC needs to be made aware of this immediately. I'm sure they would be very interested to know the involvement of Ron Fossum as well. The sooner the SEC gets involved, the more likely that investors having a fighting chance to get some intervention before even more money disappears into thin air. Why is Norada allowed to still raise money like this when they lost millions for many unaccredited investors?

So I agree that a private law suit may not be financially worth it for someone that invested a lower amount of capital, but we can see that there are people that have already posted on BP that they invested huge amounts like $850,000 for one person, and >$1M for another. If I were in their shoes, I would have my attorney on speed dial to get the first in line before Norada gets wiped out and bankruptcy is filed. Once you are in that scenario, all hope is lost of recovery. The smaller investors could look to pool resources to potentially a class action. Regardless, the initial conversations need to be had with attorney's to get their input and the SEC needs to be made aware of the situation along with the involvement of parties that have already been convicted of defrauding investors!

[V.G Jason]

Quote from @Chris Seveney:

Quote from @Don Konipol:

New posters often do not understand the purpose, procedures, and people on BP forums.  There is no need to personally attach the intelligence or integrity of anyone who posts something you disagree with or who disagrees with something you post.  Further, there’s no reason to attack someone who points out that you’ve provided no proof of whatever point you’re making.  This doe t mean that the poster is someone in cohorts or a “supporter” of the person, business or methodology you claim defrauded you.

Based on my posts in the other thread on the same topic, I have been receiving emails providing additional information purported to show proof of fraud, though I have NO WAY of verifying it.  So, I will say that until PROOF of fraud is shown, I won’t comment on what MAYBE.  However, I will comment on the investment strategy enacted by the subject. It was just plain STUPID. From what I know of the sponsor’s background, they have NO basis to believe they can successfully navigate the very complicated business of revitalizing a name brand via on line sales only.  Obviously, they, or the co they financed, purchased these brand names that all other major brand companies passed over.  
Apparently investors were made aware of what the investment was, and the “security” behind the “notes”.  If they didn’t understand or realize that what they were investing in was not secured by real property, that’s probably because despite being ACCREDITED they’re NOT SOPHISTICATED.  As @Chris Seveney mentioned in the other thread, the qualifier for accreditation is based on 1981 prices.  $1 million net worth or $200k salary is not “elite” after 43 years of inflationary currency depreciation. 

The fact that this sponsor used investor money to gamble on high yield unsecured notes leaves a bad taste in my mouth.  The fact that the sponsor can unilaterally convert the notes to equity furthers that bad taste.  I hope the investors are able to recover at least some of their investment; but truth be told this has the feel of a total debacle.  Also hoping investors were cognizant of my rule of never investing more than 10% of your investable assets in any one deal, nor more than 20% with any one “sponsor”.  

I agree. I am not a sympathizer at all - I can tell you that I can count 20+ investors who told me the returns we offer are a joke compared to offerings like this one and others. Too many people chase returns and do not research the offering or risk - for me personally, I think this offering was a very bad investment thesis and am not surprised by the outcome - but I also think STR's and MTR's are dumb as well - so its not a knock on one person or one business model. Just my opinion

It is clear that the original poster is upset - which they should be - but posting in every Norada post on BP that they were lied too without providing a stick of evidence on what they were told or providing what is in the offering docs - people want proof before taking a side - that is all we are saying. Great take it to the courts and let them decide. Once its filed it is public record so we would love to read the lawsuit. 

You're not wrong. Neither is Jay.

But let David vent. He has all the rights to be upset. David, you got played. It's very likely, you got played  fair & square per the letter of the law but if it makes you happy to scream at the top of the mountain go for it. I think that's perfectly fine to do. Just don't expect anything to come out if it. 

That's just my take on managing expectations. But in regards to your feelings & emotions, have at it homie. Be loud, but be correct.

As for how people should invest, we've been expecting the note funds to crumple. We knew there was some hot air in them, I expected more fraudulent folks to have created note "funds" and it pyramid down and blow up but i think a lot got stopped in their tracks when they were anticipating a rate cut and not a lot of higher % debt notes to be offered so they never indulged in such tomfoolery. Even spite that,  we still got some air of out of some. Including one with a "great" rep on here.

There's more to come, for sure. 

[Jay Hinrichs]

Quote from @Jon P.:

I think it's safe to assume your capital is gone in failed business ventures. Sorry to be the bearer of bad news, but when you look at the facts of what money was invested in and how it was handled, it leaves little to hope for.

The only potential to get anything back is a potential SEC / FBI investigation to see if any fraud was at play where other assets of Norada is possibly garnished to pay back investors. I also think the first ones in line with an actual lawsuit will be the the first ones in line for judgements. That is how it works with judgements. Literally, first come first serve, assuming you are granted a judgement, of course. Sitting around waiting and hoping will get you no where.

Also, history seems to repeat itself. Not sure if anyone is aware of this, but Marco's partner and CFO, Ronald Fossum, was charged with fraud by the SEC fairly recently and barred from participating in any type of similar activity. Well, here we are again. I think the SEC would like to know about his participation with Norada and the current situation at hand. The most concerning piece here is that Norada is still actively raising money from their investors as if nothing is happening! At first I looked at this as possibly just a failed investment where millions of unaccredited investors lost money (still very bad for everyone involved), but after learning about the involvement of Ronald Fossum that has a convicted history of defrauding investors and the fact that Norada is still raising money from investors, my mind now goes immediately to possible Ponzi Scheme paying past investors current funds being raised. I can't help but think there is something more malicious here than just a bad investment by looking at the facts. Time will tell, but for anyone invested with Norada, you are best off filing a complaint with the SEC and seeking legal guidance sooner rather than later. Sorry to hear so many people got caught up in this mess. Seems like tens of millions of dollars were raised from unaccredited investors...

Here are some SEC links for a partner and CFO of Norada showing previous fraud history:

https://www.sec.gov/enforcement-litigation/litigation-releas...

https://www.sec.gov/files/litigation/complaints/2017/comp240...

Based on what has been uncovered so far with the partnership between Marco and Ronald Fossum who has already been guilty of defrauding investors and barred by the SEC from participating in activity like this, I would say, yeah, there is a high likelihood of fraud in this case. Not to mention that Norada still is advertising private investment opportunities paying 17%, etc. That has Ponzi written all over it. I've seen the SEC come in and shut down bad operators immediately as a risk to the public when they continue to raise money like this. I think the SEC needs to be made aware of this immediately. I'm sure they would be very interested to know the involvement of Ron Fossum as well. The sooner the SEC gets involved, the more likely that investors having a fighting chance to get some intervention before even more money disappears into thin air. Why is Norada allowed to still raise money like this when they lost millions for many unaccredited investors?

So I agree that a private law suit may not be financially worth it for someone that invested a lower amount of capital, but we can see that there are people that have already posted on BP that they invested huge amounts like $850,000 for one person, and >$1M for another. If I were in their shoes, I would have my attorney on speed dial to get the first in line before Norada gets wiped out and bankruptcy is filed. Once you are in that scenario, all hope is lost of recovery. The smaller investors could look to pool resources to potentially a class action. Regardless, the initial conversations need to be had with attorney's to get their input and the SEC needs to be made aware of the situation along with the involvement of parties that have already been convicted of defrauding investors!

Well this whole deal is going to get super complicated as it does appear to mirror to some extent those complaints you cited..  I would need to see Norada's actual investment docs personally to make a decision. And his direct employees are allowed to sell these notes if they were registered and disclosed properly.. But if this company Tardus was selling these notes and getting comp .. they are going to have issues if they are not licensed RAs or broker dealers..

[Account Closed]

Just out of curiosity I pulled an old thread from 2 years ago, with raving reviews of Norada, and was shocked to discover that people invested $50K-$100K knowing that they were buying just a piece of paper (promissory Note), with no assets to secure their investment. Norada was basically borrowing and owing unsecured debt, like a revolving credit card debt. If someone promised me to return 24% on money borrowed and gave me a piece of paper I would make a counter offer to sell them a Brooklyn bridge. Why anyone thought this was a good investment is beyond my comprehension. You would think someone in possession of $100K+ cash would be wiser in managing their money. 

[Account Closed]

https://noradacapital.com/faq/

[Chris Seveney]

@Jay Hinrichs

I have spoken with tardus about my fund - they do not “sell” investments / get compensated based on investment. They are more like an investment club / provide coaching (I am guessing for a fee) but I as a sponsor was told we don’t get any fee or have to provide any kickback

Someone I know who is a member noted they do not act as investment advisors or provide investment advice nor are paid based on specific investments but I am sure someone can Confirm this

[Jay Hinrichs]

Quote from @Chris Seveney:

@Jay Hinrichs

I have spoken with tardus about my fund - they do not “sell” investments / get compensated based on investment. They are more like an investment club / provide coaching (I am guessing for a fee) but I as a sponsor was told we don’t get any fee or have to provide any kickback

Someone I know who is a member noted they do not act as investment advisors or provide investment advice nor are paid based on specific investments but I am sure someone can Confirm this

I wonder how they get paid then.. ??? I saw on their site that one of the owners is an attorney so U have to figure she knows better than to take comp for selling this sort of products. I can still see them getting wrapped into this a good attorney representing folks that lost money is going to name anyone and everyone who came into the deal.. If for nothing more than to beat small settlements out of them to get out of the litigation and help their client afford the legal fees.. I have seen that happen.. Happened to me many years ago on a Townhouse development I was the Broker for in the 80s.. The developer and his funding source went to battle.. Funding source ( off shore) Sued him and everyone associated with the project down to the janitor.  Myself there were 32 defendants.. all of them paid 5 to 10k to get out of the case.. I would not settle and 7 years later the case died along with the funding source.. He would never come over from China to deposition. My dads lawyer represented me pro bono.. So ended OK for me.

[Chris Seveney]

@Jay Hinrichs

When I looked into it - I viewed it more as those who teach infinite banking etc (note that is not what tardus does - they teach what they call income snowball)

Similar to infinite banking - it’s a strategy and you pay to learn the strategy - but whatever you invest in is up to you. Of course anyone can sue anyone for anything.

[Jay Hinrichs]

Quote from @Chris Seveney:

@Jay Hinrichs

When I looked into it - I viewed it more as those who teach infinite banking etc (note that is not what tardus does - they teach what they call income snowball)

Similar to infinite banking - it’s a strategy and you pay to learn the strategy - but whatever you invest in is up to you. Of course anyone can sue anyone for anything.

I get that but when you have what could be wipe outs here It would not surprise me that lawyers will go after anyone and everyone who might have been a nexus for their clients to invest in this.
Not sure why anyone would pay to learn how to snowball a mortgage ..  ????

[Henry Clark]

OP. Look like your trying to inform investors

What are your learning points?    
1. How much did you invest?    
2.   What percentage of your wealth?   
3.  Do you use a varied investment approach or just one type?

4.  Reviewing investment documents?

5.  All of these investments have the same underlying points.  Does financing period match the investment period?,  occupancy rates, capex plans, competitor rental rate study, market study, etc.  Which of the above did you research?  Which of the above created the failure or postponement of payments?    What have you learned that you can share?  

[Jay Hinrichs]

Quote from @Henry Clark:

OP. Look like your trying to inform investors

What are your learning points?    
1. How much did you invest?    
2.   What percentage of your wealth?   
3.  Do you use a varied investment approach or just one type?

4.  Reviewing investment documents?

5.  All of these investments have the same underlying points.  Does financing period match the investment period?,  occupancy rates, capex plans, competitor rental rate study, market study, etc.  Which of the above did you research?  Which of the above created the failure or postponement of payments?    What have you learned that you can share?  

Henry to catch you up on this situation.. these were unsecured Prom Notes. that invested in companies crypto and off broadway theater shows.. there was no real estate to underwrite as non of it was secured by physical assets..

[Jay Hinrichs]

Quote from @V.G Jason:

Quote from @Chris Seveney:

Quote from @Don Konipol:

New posters often do not understand the purpose, procedures, and people on BP forums.  There is no need to personally attach the intelligence or integrity of anyone who posts something you disagree with or who disagrees with something you post.  Further, there’s no reason to attack someone who points out that you’ve provided no proof of whatever point you’re making.  This doe t mean that the poster is someone in cohorts or a “supporter” of the person, business or methodology you claim defrauded you.

Based on my posts in the other thread on the same topic, I have been receiving emails providing additional information purported to show proof of fraud, though I have NO WAY of verifying it.  So, I will say that until PROOF of fraud is shown, I won’t comment on what MAYBE.  However, I will comment on the investment strategy enacted by the subject. It was just plain STUPID. From what I know of the sponsor’s background, they have NO basis to believe they can successfully navigate the very complicated business of revitalizing a name brand via on line sales only.  Obviously, they, or the co they financed, purchased these brand names that all other major brand companies passed over.  
Apparently investors were made aware of what the investment was, and the “security” behind the “notes”.  If they didn’t understand or realize that what they were investing in was not secured by real property, that’s probably because despite being ACCREDITED they’re NOT SOPHISTICATED.  As @Chris Seveney mentioned in the other thread, the qualifier for accreditation is based on 1981 prices.  $1 million net worth or $200k salary is not “elite” after 43 years of inflationary currency depreciation. 

The fact that this sponsor used investor money to gamble on high yield unsecured notes leaves a bad taste in my mouth.  The fact that the sponsor can unilaterally convert the notes to equity furthers that bad taste.  I hope the investors are able to recover at least some of their investment; but truth be told this has the feel of a total debacle.  Also hoping investors were cognizant of my rule of never investing more than 10% of your investable assets in any one deal, nor more than 20% with any one “sponsor”.  

I agree. I am not a sympathizer at all - I can tell you that I can count 20+ investors who told me the returns we offer are a joke compared to offerings like this one and others. Too many people chase returns and do not research the offering or risk - for me personally, I think this offering was a very bad investment thesis and am not surprised by the outcome - but I also think STR's and MTR's are dumb as well - so its not a knock on one person or one business model. Just my opinion

It is clear that the original poster is upset - which they should be - but posting in every Norada post on BP that they were lied too without providing a stick of evidence on what they were told or providing what is in the offering docs - people want proof before taking a side - that is all we are saying. Great take it to the courts and let them decide. Once its filed it is public record so we would love to read the lawsuit. 

You're not wrong. Neither is Jay.

But let David vent. He has all the rights to be upset. David, you got played. It's very likely, you got played  fair & square per the letter of the law but if it makes you happy to scream at the top of the mountain go for it. I think that's perfectly fine to do. Just don't expect anything to come out if it. 

That's just my take on managing expectations. But in regards to your feelings & emotions, have at it homie. Be loud, but be correct.

As for how people should invest, we've been expecting the note funds to crumple. We knew there was some hot air in them, I expected more fraudulent folks to have created note "funds" and it pyramid down and blow up but i think a lot got stopped in their tracks when they were anticipating a rate cut and not a lot of higher % debt notes to be offered so they never indulged in such tomfoolery. Even spite that,  we still got some air of out of some. Including one with a "great" rep on here.

There's more to come, for sure. 

VG  when you talk about NOTE FUNDS are you talking about Note Funds that buy or originate notes secured by real Estate or are there other funds that do the same model of raising money on unsecured Notes ?   kind of like prosper and those type of companies ( which I cant see loaning money to individuals totally unsecred like a CC company ) that seems like super high risk.

[V.G Jason]

Quote from @Jay Hinrichs:

Quote from @V.G Jason:

Quote from @Chris Seveney:

Quote from @Don Konipol:

New posters often do not understand the purpose, procedures, and people on BP forums.  There is no need to personally attach the intelligence or integrity of anyone who posts something you disagree with or who disagrees with something you post.  Further, there’s no reason to attack someone who points out that you’ve provided no proof of whatever point you’re making.  This doe t mean that the poster is someone in cohorts or a “supporter” of the person, business or methodology you claim defrauded you.

Based on my posts in the other thread on the same topic, I have been receiving emails providing additional information purported to show proof of fraud, though I have NO WAY of verifying it.  So, I will say that until PROOF of fraud is shown, I won’t comment on what MAYBE.  However, I will comment on the investment strategy enacted by the subject. It was just plain STUPID. From what I know of the sponsor’s background, they have NO basis to believe they can successfully navigate the very complicated business of revitalizing a name brand via on line sales only.  Obviously, they, or the co they financed, purchased these brand names that all other major brand companies passed over.  
Apparently investors were made aware of what the investment was, and the “security” behind the “notes”.  If they didn’t understand or realize that what they were investing in was not secured by real property, that’s probably because despite being ACCREDITED they’re NOT SOPHISTICATED.  As @Chris Seveney mentioned in the other thread, the qualifier for accreditation is based on 1981 prices.  $1 million net worth or $200k salary is not “elite” after 43 years of inflationary currency depreciation. 

The fact that this sponsor used investor money to gamble on high yield unsecured notes leaves a bad taste in my mouth.  The fact that the sponsor can unilaterally convert the notes to equity furthers that bad taste.  I hope the investors are able to recover at least some of their investment; but truth be told this has the feel of a total debacle.  Also hoping investors were cognizant of my rule of never investing more than 10% of your investable assets in any one deal, nor more than 20% with any one “sponsor”.  

I agree. I am not a sympathizer at all - I can tell you that I can count 20+ investors who told me the returns we offer are a joke compared to offerings like this one and others. Too many people chase returns and do not research the offering or risk - for me personally, I think this offering was a very bad investment thesis and am not surprised by the outcome - but I also think STR's and MTR's are dumb as well - so its not a knock on one person or one business model. Just my opinion

It is clear that the original poster is upset - which they should be - but posting in every Norada post on BP that they were lied too without providing a stick of evidence on what they were told or providing what is in the offering docs - people want proof before taking a side - that is all we are saying. Great take it to the courts and let them decide. Once its filed it is public record so we would love to read the lawsuit. 

You're not wrong. Neither is Jay.

But let David vent. He has all the rights to be upset. David, you got played. It's very likely, you got played  fair & square per the letter of the law but if it makes you happy to scream at the top of the mountain go for it. I think that's perfectly fine to do. Just don't expect anything to come out if it. 

That's just my take on managing expectations. But in regards to your feelings & emotions, have at it homie. Be loud, but be correct.

As for how people should invest, we've been expecting the note funds to crumple. We knew there was some hot air in them, I expected more fraudulent folks to have created note "funds" and it pyramid down and blow up but i think a lot got stopped in their tracks when they were anticipating a rate cut and not a lot of higher % debt notes to be offered so they never indulged in such tomfoolery. Even spite that,  we still got some air of out of some. Including one with a "great" rep on here.

There's more to come, for sure. 

VG  when you talk about NOTE FUNDS are you talking about Note Funds that buy or originate notes secured by real Estate or are there other funds that do the same model of raising money on unsecured Notes ?   kind of like prosper and those type of companies ( which I cant see loaning money to individuals totally unsecred like a CC company ) that seems like super high risk.

 Chris mentioned this before, so I am really piggybacking those thoughts but definitely agreed with them then. But fly by night note funds coming out of the woodworks to capitalize on this "high" rate environment by creating note investment "funds" that really had terrible ways of raising capital and minute chance by real estate, and promising something egregious like 15-20% +. That's what I mean when I say fraudulent folks coming into this space.

This did not materialize as much as I thought and I think it was cause everyone anticipated a rate cut, thus such a fund wouldn't need to be made. Well 6 months + later, still no rate cut in sight and I think it won't happen sooner than Nov.

[Henry Clark]

Quote from @Jay Hinrichs:

Quote from @Henry Clark:

OP. Look like your trying to inform investors

What are your learning points?    
1. How much did you invest?    
2.   What percentage of your wealth?   
3.  Do you use a varied investment approach or just one type?

4.  Reviewing investment documents?

5.  All of these investments have the same underlying points.  Does financing period match the investment period?,  occupancy rates, capex plans, competitor rental rate study, market study, etc.  Which of the above did you research?  Which of the above created the failure or postponement of payments?    What have you learned that you can share?  

Henry to catch you up on this situation.. these were unsecured Prom Notes. that invested in companies crypto and off broadway theater shows.. there was no real estate to underwrite as non of it was secured by physical assets..

 That is even worse.  OP why are you in a Real Estate forum.  Plus if you’re investing in debt tied to Crypto or Broadway shows. You deserve to lose your money.  It’s a matter of Risk Reward. Both of those are risky.  Plus you did the reverse on length of investment with a 7 year note. Broadway or crypto has a shorter run than 7 years, you exposed yourself unnecessarily.   What was your investment and what type of return did they offer you.

I have no problem people losing money if they were expecting excessive returns on high risk products. I’ve lost 100% on 20% of my wealth at the time.  It was high risk and it was my fault.  
I took it as a learning moment.  Share your learning moment. 

[Jay Hinrichs]

Quote from @V.G Jason:

Quote from @Jay Hinrichs:

Quote from @V.G Jason:

Quote from @Chris Seveney:

Quote from @Don Konipol:

New posters often do not understand the purpose, procedures, and people on BP forums.  There is no need to personally attach the intelligence or integrity of anyone who posts something you disagree with or who disagrees with something you post.  Further, there’s no reason to attack someone who points out that you’ve provided no proof of whatever point you’re making.  This doe t mean that the poster is someone in cohorts or a “supporter” of the person, business or methodology you claim defrauded you.

Based on my posts in the other thread on the same topic, I have been receiving emails providing additional information purported to show proof of fraud, though I have NO WAY of verifying it.  So, I will say that until PROOF of fraud is shown, I won’t comment on what MAYBE.  However, I will comment on the investment strategy enacted by the subject. It was just plain STUPID. From what I know of the sponsor’s background, they have NO basis to believe they can successfully navigate the very complicated business of revitalizing a name brand via on line sales only.  Obviously, they, or the co they financed, purchased these brand names that all other major brand companies passed over.  
Apparently investors were made aware of what the investment was, and the “security” behind the “notes”.  If they didn’t understand or realize that what they were investing in was not secured by real property, that’s probably because despite being ACCREDITED they’re NOT SOPHISTICATED.  As @Chris Seveney mentioned in the other thread, the qualifier for accreditation is based on 1981 prices.  $1 million net worth or $200k salary is not “elite” after 43 years of inflationary currency depreciation. 

The fact that this sponsor used investor money to gamble on high yield unsecured notes leaves a bad taste in my mouth.  The fact that the sponsor can unilaterally convert the notes to equity furthers that bad taste.  I hope the investors are able to recover at least some of their investment; but truth be told this has the feel of a total debacle.  Also hoping investors were cognizant of my rule of never investing more than 10% of your investable assets in any one deal, nor more than 20% with any one “sponsor”.  

I agree. I am not a sympathizer at all - I can tell you that I can count 20+ investors who told me the returns we offer are a joke compared to offerings like this one and others. Too many people chase returns and do not research the offering or risk - for me personally, I think this offering was a very bad investment thesis and am not surprised by the outcome - but I also think STR's and MTR's are dumb as well - so its not a knock on one person or one business model. Just my opinion

It is clear that the original poster is upset - which they should be - but posting in every Norada post on BP that they were lied too without providing a stick of evidence on what they were told or providing what is in the offering docs - people want proof before taking a side - that is all we are saying. Great take it to the courts and let them decide. Once its filed it is public record so we would love to read the lawsuit. 

You're not wrong. Neither is Jay.

But let David vent. He has all the rights to be upset. David, you got played. It's very likely, you got played  fair & square per the letter of the law but if it makes you happy to scream at the top of the mountain go for it. I think that's perfectly fine to do. Just don't expect anything to come out if it. 

That's just my take on managing expectations. But in regards to your feelings & emotions, have at it homie. Be loud, but be correct.

As for how people should invest, we've been expecting the note funds to crumple. We knew there was some hot air in them, I expected more fraudulent folks to have created note "funds" and it pyramid down and blow up but i think a lot got stopped in their tracks when they were anticipating a rate cut and not a lot of higher % debt notes to be offered so they never indulged in such tomfoolery. Even spite that,  we still got some air of out of some. Including one with a "great" rep on here.

There's more to come, for sure. 

VG  when you talk about NOTE FUNDS are you talking about Note Funds that buy or originate notes secured by real Estate or are there other funds that do the same model of raising money on unsecured Notes ?   kind of like prosper and those type of companies ( which I cant see loaning money to individuals totally unsecred like a CC company ) that seems like super high risk.

 Chris mentioned this before, so I am really piggybacking those thoughts but definitely agreed with them then. But fly by night note funds coming out of the woodworks to capitalize on this "high" rate environment by creating note investment "funds" that really had terrible ways of raising capital and minute chance by real estate, and promising something egregious like 15-20% +. That's what I mean when I say fraudulent folks coming into this space.

This did not materialize as much as I thought and I think it was cause everyone anticipated a rate cut, thus such a fund wouldn't need to be made. Well 6 months + later, still no rate cut in sight and I think it won't happen sooner than Nov.

Ok then your talking about a fund that might buy defaulted paper in the secondary market with the thoughts of either reinvigorating the borrowers or foreclosing and selling the asset and there by creating the returns.  ?   From what I hear Chris say is that there has been a very big shortage of notes to purchase at least for the last few years that could be changing now.. I dont play in that sandbox so i dont really know... But I do think that some of those folks in this space have gone into doing some new origination's to keep deal flow ????

[Jay Hinrichs]

Quote from @Henry Clark:

Quote from @Jay Hinrichs:

Quote from @Henry Clark:

OP. Look like your trying to inform investors

What are your learning points?    
1. How much did you invest?    
2.   What percentage of your wealth?   
3.  Do you use a varied investment approach or just one type?

4.  Reviewing investment documents?

5.  All of these investments have the same underlying points.  Does financing period match the investment period?,  occupancy rates, capex plans, competitor rental rate study, market study, etc.  Which of the above did you research?  Which of the above created the failure or postponement of payments?    What have you learned that you can share?  

Henry to catch you up on this situation.. these were unsecured Prom Notes. that invested in companies crypto and off broadway theater shows.. there was no real estate to underwrite as non of it was secured by physical assets..

 That is even worse.  OP why are you in a Real Estate forum.  Plus if you’re investing in debt tied to Crypto or Broadway shows. You deserve to lose your money.  It’s a matter of Risk Reward. Both of those are risky.  Plus you did the reverse on length of investment with a 7 year note. Broadway or crypto has a shorter run than 7 years, you exposed yourself unnecessarily.   What was your investment and what type of return did they offer you.

I have no problem people losing money if they were expecting excessive returns on high risk products. I’ve lost 100% on 20% of my wealth at the time.  It was high risk and it was my fault.  
I took it as a learning moment.  Share your learning moment. 

Henry the returns were 12 to 17% depending on amount invested and how long you locked up. the other thing that this fund invested in was  defunct brick and motor like radio shack  stien mart etc with the idea that they were going to turn those old name brands into  on line sales . And that appears to not have worked.
the Sponsor according to the thread here invested in these deals with a guy named Tai Lopez who is well known.. and if i read this right Tai was offering 25% annual return to the Norada and Norada was making the delta between the 25% and the 12 to 17% they wrote thier notes for .

I think I have that correct.. But if your curious you can read through all these replys and see if I am missing anything.. these are just the crib notes.. :)

[V.G Jason]

Quote from @Jay Hinrichs:

Quote from @V.G Jason:

Quote from @Jay Hinrichs:

Quote from @V.G Jason:

Quote from @Chris Seveney:

Quote from @Don Konipol:

New posters often do not understand the purpose, procedures, and people on BP forums.  There is no need to personally attach the intelligence or integrity of anyone who posts something you disagree with or who disagrees with something you post.  Further, there’s no reason to attack someone who points out that you’ve provided no proof of whatever point you’re making.  This doe t mean that the poster is someone in cohorts or a “supporter” of the person, business or methodology you claim defrauded you.

Based on my posts in the other thread on the same topic, I have been receiving emails providing additional information purported to show proof of fraud, though I have NO WAY of verifying it.  So, I will say that until PROOF of fraud is shown, I won’t comment on what MAYBE.  However, I will comment on the investment strategy enacted by the subject. It was just plain STUPID. From what I know of the sponsor’s background, they have NO basis to believe they can successfully navigate the very complicated business of revitalizing a name brand via on line sales only.  Obviously, they, or the co they financed, purchased these brand names that all other major brand companies passed over.  
Apparently investors were made aware of what the investment was, and the “security” behind the “notes”.  If they didn’t understand or realize that what they were investing in was not secured by real property, that’s probably because despite being ACCREDITED they’re NOT SOPHISTICATED.  As @Chris Seveney mentioned in the other thread, the qualifier for accreditation is based on 1981 prices.  $1 million net worth or $200k salary is not “elite” after 43 years of inflationary currency depreciation. 

The fact that this sponsor used investor money to gamble on high yield unsecured notes leaves a bad taste in my mouth.  The fact that the sponsor can unilaterally convert the notes to equity furthers that bad taste.  I hope the investors are able to recover at least some of their investment; but truth be told this has the feel of a total debacle.  Also hoping investors were cognizant of my rule of never investing more than 10% of your investable assets in any one deal, nor more than 20% with any one “sponsor”.  

I agree. I am not a sympathizer at all - I can tell you that I can count 20+ investors who told me the returns we offer are a joke compared to offerings like this one and others. Too many people chase returns and do not research the offering or risk - for me personally, I think this offering was a very bad investment thesis and am not surprised by the outcome - but I also think STR's and MTR's are dumb as well - so its not a knock on one person or one business model. Just my opinion

It is clear that the original poster is upset - which they should be - but posting in every Norada post on BP that they were lied too without providing a stick of evidence on what they were told or providing what is in the offering docs - people want proof before taking a side - that is all we are saying. Great take it to the courts and let them decide. Once its filed it is public record so we would love to read the lawsuit. 

You're not wrong. Neither is Jay.

But let David vent. He has all the rights to be upset. David, you got played. It's very likely, you got played  fair & square per the letter of the law but if it makes you happy to scream at the top of the mountain go for it. I think that's perfectly fine to do. Just don't expect anything to come out if it. 

That's just my take on managing expectations. But in regards to your feelings & emotions, have at it homie. Be loud, but be correct.

As for how people should invest, we've been expecting the note funds to crumple. We knew there was some hot air in them, I expected more fraudulent folks to have created note "funds" and it pyramid down and blow up but i think a lot got stopped in their tracks when they were anticipating a rate cut and not a lot of higher % debt notes to be offered so they never indulged in such tomfoolery. Even spite that,  we still got some air of out of some. Including one with a "great" rep on here.

There's more to come, for sure. 

VG  when you talk about NOTE FUNDS are you talking about Note Funds that buy or originate notes secured by real Estate or are there other funds that do the same model of raising money on unsecured Notes ?   kind of like prosper and those type of companies ( which I cant see loaning money to individuals totally unsecred like a CC company ) that seems like super high risk.

 Chris mentioned this before, so I am really piggybacking those thoughts but definitely agreed with them then. But fly by night note funds coming out of the woodworks to capitalize on this "high" rate environment by creating note investment "funds" that really had terrible ways of raising capital and minute chance by real estate, and promising something egregious like 15-20% +. That's what I mean when I say fraudulent folks coming into this space.

This did not materialize as much as I thought and I think it was cause everyone anticipated a rate cut, thus such a fund wouldn't need to be made. Well 6 months + later, still no rate cut in sight and I think it won't happen sooner than Nov.

Ok then your talking about a fund that might buy defaulted paper in the secondary market with the thoughts of either reinvigorating the borrowers or foreclosing and selling the asset and there by creating the returns.  ?   From what I hear Chris say is that there has been a very big shortage of notes to purchase at least for the last few years that could be changing now.. I dont play in that sandbox so i dont really know... But I do think that some of those folks in this space have gone into doing some new origination's to keep deal flow ????

 I would think they'd create a note fund then go talk to crooks like tai lopez and show a higher yield. Basically, I was expecting a lot more of Norada-esque stuff to happen. And a lot less did, and my belief is because everyone's been anticipating a rate cut.

[Chris Seveney]

@Jay Hinrichs

Yep - npl space right now pricing is high and thus returns have shrunk just like every other asset class. We mix it up with performing and non performing loans and we have some performing that are short term bridge loans as my confidence in reperforming paper is low based on the re default rate risk.

One last thing to touch on, there was a comment that I am one of Marco’s henchman. I have never spoken to him in my life and if anything he would be “a competitor” but only to the point for investors since his investment strategy is so different than ours and we do not play in the same asset class but may have cross pollination for potential investors.

[Jay Hinrichs]

Quote from @Chris Seveney:

@Jay Hinrichs

Yep - npl space right now pricing is high and thus returns have shrunk just like every other asset class. We mix it up with performing and non performing loans and we have some performing that are short term bridge loans as my confidence in reperforming paper is low based on the re default rate risk.

One last thing to touch on, there was a comment that I am one of Marco’s henchman. I have never spoken to him in my life and if anything he would be “a competitor” but only to the point for investors since his investment strategy is so different than ours and we do not play in the same asset class but may have cross pollination for potential investors.

Wow not sure how anyone can make that leap.. Marco's RE arm has certainly sold properties that I own.. But I have never met or talked to him personally.. just like most sellers never talk to the agents that bring in the buyers.. I do hope this works out better than it looks though for everyone involved Like Chris C mentioned in his post we do need all the facts.

[Jon P.]

@Jay Hinrichs

For your comments on Tardus, I am not sure if they took compensation or not for referring their clients to invest in Norada. All I can say is that it's quite obvious that they highly encouraged people to invest in Norada. I've spoken to numerous Tardus members already that said their "coach" recommended Norada as one of the best investments currently available. If they are not licensed financial advisors, shouldn't they not be recommending any investments or securities, especially if they are not licensed RAs? It appears Tardus is also very adamant about defending Ron Fossum. They seem to have a long standing relationship with him.

Also, what about the Norada sales reps that sold this investment offering with proper licensing? I mean, I can't say for sure, but I would venture to guess that they are 1099 sales folks paid on commission for selling these investments, and my best guess would be that they are not licensed to sell securities. They are definitely getting paid for it. Would there be any liability there in your opinion? I know I spoke to a guy Michael Johnson, and I've heard others working with Nate Hall on their team. I'm not 100% sure, but I believe these guys are still selling the new "investment option" they are now marketing at 17% returns when they are not paying investors in current notes. Again, just another layer here of things that were handled inappropriately all around from licensing, marketing, disclosures, etc. Of course, in addition to the fact Ron Fossum, Norada's CFO, has history of defrauding investors with the SEC and was banned from any future activity like this.

[Al D.]

(Side note) Warning for the OP: I would not share certain specifics about this investment loss and your net worth, and perhaps other specific info you may feel inclined to also share here at that point. (Tho, you’ve had time to make that reply by now, and have not, so you may not need this warning. But my hope is that it may serve others.)

This is a public forum, in which you have been using presumably your real name, and certain bad actors may be paying attention. Your situation is still unfolding.

While this recent official warning is not about your specific type of investment, any investment loss victim with potential for a legal action should consider it: https://www.ic3.gov/Media/Y2024/PSA240624.

Thank you for trying to warn others with your post. And separate thanks to other posters who have attempted to provide greater context and education about this type of investment.

[Don Konipol]

I went back and reread the OPs posts.  He became progressively unhinged as time progressed, especially when anyone made a comment he didn’t like or agree with, even if the comment was of a general nature.  He resorted to personal attacks on the integrity of other posters as well as a seemingly paranoia concerning posters being somehow associated with the subject company.  Of course he offered no basis for his accusations.  
His posts on this thread were his only posts on BP.  While none of this provides any evidence one way or the other about the legality- legitimacy of the offering or company in question, it does say something about the state of mind of at least one person who invested in this offering. 
The fact that a company has stoped paying interest on a promissory note and is exercising an option stated in the note to convert the note to equity is not in and of itself indicative of any fraud.  Of more concern to me would be the ridiculous investment strategy; the qualification of the sponsors to evaluate these brand investments; whether proper and full disclosure was provided; and the fees and other compensation the sponsor received on invested capital.