Norada Capital Management suspending payments

[Paula Impala]

I invested in Norada Capital Management and was coming here to connect with others who have invested. Did not receive my payment from Norada this month (June) and just received the following notification in my email.

Any thoughts or recommendations from fellow investors.  Thank you in advance for any advice or insight.

Dear Valued Investor,

I hope you are well. As a lender (aka “Maker”) to Norada, you are a valued member of the Norada family.
The purpose of this correspondence is to provide you with an update on the repayment under the terms of the promissory note (“Note”) as an obligation of Norada Capital Management, LLC (“Norada”).
As with all businesses, Norada is subject to market factors that could impact its ability to make payments. Due to current market conditions and unforeseen financial challenges, we have decided to temporarily suspend distribution payments. This decision was not made lightly and comes after thorough deliberation and analysis of our current financial position.
This requires us to exercise our right to convert your Note and issue equity (aka membership interests) in Norada. You will recall that your Note allows Norada to convert the outstanding balance owed into equity and that it can redeem that equity in the future by repayment of the Note principal in full. There is nothing required by you related to your Note being converted. It happens automatically upon notice being sent.
As such, this email will provide you notice that Norada has chosen to exercise its right under the Note §6 to issue equity to you in Norada. Your equity is valued at the unpaid face value of the Note plus any accrued but unpaid interest. We expect to be in a position to redeem your interests in short order, and we will keep you posted, as always, on any developments in this regard.

We understand the importance of distributions to our investors and recognize the impact this decision may have on your financial planning. Please be assured that this suspension is temporary. We are committed to resuming regular distributions as soon as our financial situation stabilizes and improves.

Our primary goal is to ensure the long-term stability and sustainability of our business. By temporarily halting distributions, we can preserve capital, manage our resources more effectively, and invest in key areas that will drive future growth and profitability.

In the interim, we are taking strategic steps to strengthen our financial health, including cost-reduction measures, revenue-generating initiatives, and debt restructuring options. Our management team is dedicated to navigating through these challenges and emerging stronger.
We greatly appreciate your understanding and patience during this time. We remain committed to transparency and will keep you informed of any significant developments. If you have any questions or need further clarification, please feel free to contact me directly. (I will do my best to reply to your email in a timely manner.)
Thank you for your continued trust and support.
Sincerely,

Marco SantarelliFounder & CEONorada Capital Management

[Engelo Rumora]

Quote from @Chris Seveney:

Quote from @James Wise:

Quote from @Chris Seveney:

Btw anyone see a common thread between this, lane k. ODC, Rad etc and others who have been making headlines on BP?

Oh, they are all out there right now on the “training / membership” circuit trying to sell you on a lifestyle or an investment strategy. Atleast I don’t get FB ads from Norada.

 I haven't seen or heard anything about lane k, ODC or Rad............Post the links.

Here you go.

RAD Diversified Review — It Wasn't Pretty (biggerpockets.com)
RAD Diversified SCAM ALERT!!! (biggerpockets.com)
PEP fund with Lane Kawaoka (biggerpockets.com)
Syndicator Threatens LPs for Negative Comment about them On BP (biggerpockets.com)

Anyone has invested with Open door capital? How was your experience? (biggerpockets.com)

Chris and James,

Want to start a fund together?

Big D Fund

Chris, you raise the capital

James and I buy, fix and collect rents on D Class property.

We do it with bullet proof vests and shot guns.

We also do it without any pants.

James pumps the video marketing and the fund shares some in on the YouTube royalties.

Plus, the rents we collect in cash as distributions. 

I bet we could easily pay 10% on such a fund hahaha

[Jay Hinrichs]

Quote from @Jon P.:

@Jay Hinrichs I am not an attorney, but I'm thankfully connected with some very good ones, and they are interested to learn more about this case working in the fraud sector.

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.

I am no securities expert but I believe an employee of the entity that creates the notes can be paid a commission.. 1099 good question.. ??  Tardus I believe could have some serious issues if they are recommending this.. but then again one of the owners is a lawyer so hopefully she thinks they are OK .. and for sure if they take comp they need to be registered RA broker dealer etc to get comp.
I know when I have introduced investors to a few of the syndicators ( MF) that I personally invested  with and know like and trust I cannot take any kind of referral fee even though my entire career has been earning commissions :).. I am not properly licensed for it. They can offer to buy me lunch or a little Avgas for my plane :)

[Jay Hinrichs]

Quote from @Jon P.:

@Jay Hinrichs I am not an attorney, but I'm thankfully connected with some very good ones, and they are interested to learn more about this case working in the fraud sector.

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.

Jon since you seem to have some deeper info on all this.. Have any of the investors simply requested a balance sheet for the company to see what the assets and liabilities are and if there is equity ?  Even if  it produced internally seems like that would be a nice thing to get a hold of.

[James Wise]

Quote from @Engelo Rumora:

Quote from @Chris Seveney:

Quote from @James Wise:

Quote from @Chris Seveney:

Btw anyone see a common thread between this, lane k. ODC, Rad etc and others who have been making headlines on BP?

Oh, they are all out there right now on the “training / membership” circuit trying to sell you on a lifestyle or an investment strategy. Atleast I don’t get FB ads from Norada.

 I haven't seen or heard anything about lane k, ODC or Rad............Post the links.

Here you go.

RAD Diversified Review — It Wasn't Pretty (biggerpockets.com)
RAD Diversified SCAM ALERT!!! (biggerpockets.com)
PEP fund with Lane Kawaoka (biggerpockets.com)
Syndicator Threatens LPs for Negative Comment about them On BP (biggerpockets.com)

Anyone has invested with Open door capital? How was your experience? (biggerpockets.com)

Chris and James,

Want to start a fund together?

Big D Fund

Chris, you raise the capital

James and I buy, fix and collect rents on D Class property.

We do it with bullet proof vests and shot guns.

We also do it without any pants.

James pumps the video marketing and the fund shares some in on the YouTube royalties.

Plus, the rents we collect in cash as distributions. 

I bet we could easily pay 10% on such a fund hahaha

 Hell of a lot better idea then sending money to Tai Lopez or whatever other nonsense people have been talking about in this thread lol.

[James Hamling]

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Could it be a BAD investment strategy AND fraud in the disclosures, method of marketing securities and or providing misleading information?

For example, did the sponsor know the investment had no chance of success, but sold it to investors anyway to make fees and commissions? How responsible are ACCREDITED investors for doing their own research and due diligence.  Was this a Reg D filing?  If so, which section?  

It's just hard to believe so many investors believing that this investment strategy was anything but ridiculous. Apparently offer 2% more than hard money (secured by real property at no more than 65% LTV) and all reasoning goes out the window.

This wasn’t a failure (if it is a failure) because of purchasing at the top; the economy crashed; pandemic closing everything down; or a massive failure of the financial system.  This was buying dead brands where PROFESSIONALS in those particular industries in question couldn’t avoid bankruptcy and every single major brand in those industries failed to bid even a minimal amount to buy those brand names  - because they knew those brand names were worthless.  

Bigger question - why the heck is corporate junk bond investments being discussed on a REAL ESTATE forum? 

Don when I lived in Napa I was at a cocktail party of a buddy Who was very well connected in the corporate world being a Brand president for one of Nestles companies. ... But I got to talking to one of his guests and that is exactly what he did.. He bought defunct brands and was  reviving them Like Bermashave and other names of yesteryear and I know there has been some success in the mid west buying old BEER brands and reviving those.. But this was late 90s so way before on line stuff had taken off. Although the Dot com stuff was big time in the SF bay area then as well. 99% of those imploded of course but a lot of them are now successful in Dotcom 2.0. So I can see how someone might get talked into this buying of old brand names.. Not sure how they talk others into investing in them though but its quite apparent that these folks made a big departure from RE and took a flyer on these notes..

I have a feeling the entire keystone to it all was as it was Notes, vs equity. 

I think the offering would have died in the lobby floor if attempted as equity. And who knows, maybe it did, maybe that's why the Notes. 

I mean, we see how much people are loving the equity positions now, not so much right. 

Which adds another layer of mystery because if you have so little faith in the operation/venture that equity is a kiss of death, how in the heck could you expect that same operation/venture to perform on the notes...... 

The whole thing just makes my head hurt trying to make sense of it all. 

[Ian Ippolito]

Quote from @Jon P.:

Keeping this thread back on track about the original topic for those who have invested with Norada and concerned about what to do next, 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...

Jon thanks for sharing.

I was trying to find some public documentation that Ronald Folsum is the CFO of Norada (google search) but came up empty.  If he is, it seems to be kept below the radar.

And Norada website itself does not list it's principals (which is...in my opinion...another red flag when deciding whether or not to invest in a sponsor).

Is there some other way to verify his involvement?

[Chris Seveney]

Quote from @Ian Ippolito:

Quote from @Jon P.:

Keeping this thread back on track about the original topic for those who have invested with Norada and concerned about what to do next, 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...

Jon thanks for sharing.

I was trying to find some public documentation that Ronald Folsum is the CFO of Norada (google search) but came up empty.  If he is, it seems to be kept below the radar.

And Norada website itself does not list it's principals (which is...in my opinion...another red flag when deciding whether or not to invest in a sponsor).

Is there some other way to verify his involvement?

 In one of the posts some of their marketing materials (not sure how old it is) had him listed as CFO but also noted he worked as a fractional CFO. He is not listed on the website anymore under:

Team | Norada Capital Management

[Ian Ippolito]

Quote from @Chris Seveney:

Quote from @Ian Ippolito:

Quote from @Jon P.:

Keeping this thread back on track about the original topic for those who have invested with Norada and concerned about what to do next, 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...

Jon thanks for sharing.

I was trying to find some public documentation that Ronald Folsum is the CFO of Norada (google search) but came up empty.  If he is, it seems to be kept below the radar.

And Norada website itself does not list it's principals (which is...in my opinion...another red flag when deciding whether or not to invest in a sponsor).

Is there some other way to verify his involvement?

 In one of the posts some of their marketing materials (not sure how old it is) had him listed as CFO but also noted he worked as a fractional CFO. He is not listed on the website anymore under:

Team | Norada Capital Management

Thanks Chris.

For the detailed management profiles, I was looking at the first Norada in Google which came up (which was Norada Real-Estate and has no management listed).  It sounds like that's not the same firm as this one and thanks.

[Chris Seveney]

Quote from @Ian Ippolito:

Quote from @Chris Seveney:

Quote from @Ian Ippolito:

Quote from @Jon P.:

Keeping this thread back on track about the original topic for those who have invested with Norada and concerned about what to do next, 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...

Jon thanks for sharing.

I was trying to find some public documentation that Ronald Folsum is the CFO of Norada (google search) but came up empty.  If he is, it seems to be kept below the radar.

And Norada website itself does not list it's principals (which is...in my opinion...another red flag when deciding whether or not to invest in a sponsor).

Is there some other way to verify his involvement?

 In one of the posts some of their marketing materials (not sure how old it is) had him listed as CFO but also noted he worked as a fractional CFO. He is not listed on the website anymore under:

Team | Norada Capital Management

Thanks Chris.

For the detailed management profiles, I was looking at the first Norada in Google which came up (which was Norada Real-Estate and has no management listed).  It sounds like that's not the same firm as this one and thanks.

 Ahh. Just looked it up, it appears to be the same leadership (guessing) as they have the same phone number and location.  Not sure why you would have multiple websites...

[Calvin Thomas]

I wonder if this would eventually make CNBC's American Greed?  They really need to make a show called American Stupidity.

[Michael P.]

Quote from @Calvin Thomas:

I wonder if this would eventually make CNBC's American Greed?  They really need to make a show called American Stupidity.

 I think back around page 2 or 3 of this endless thread there was talk about that show. 

[Jon P.]

UPDATE:

Many people received this standard notification from Norada yesterday.  Looks like money is gone.  This contradicts what was previous stated that interest payments were "suspended temporarily" but now seem to be indefinite...

How do others interpret this?

Email from Marco at Norada :

--

Dear Investor,

We hope you had a pleasant July 4th long weekend.

As promised, we've compiled the most commonly asked questions our investors have been asking below, along with concise answers.

What does conversion to equity mean to promissory note holders?
It means your note investment (principal) and any accrued interest were converted to equity in Norada Capital Management LLC.

Where is my money invested now?
You are now invested as an equity shareholder in Norada Capital Management. You now stand to benefit from any future gains in company and share value and any distributions paid to shareholders as determined by management. As mentioned in our communications, Management will provide a full breakdown of investment allocation across Norada's portfolio businesses in the coming days.

Will there be continued interest payments?
Once a note is converted to equity, there are no longer continued interest payments. You are a shareholder and benefit from potential future gains in share value, cash distributions, and redemptions from liquidity distribution events.

What led to the decision to suspend payments?
After thorough deliberation and analysis of market conditions, the cash distribution position of our investments, and our current financial position, we decided to suspend distribution payments and convert Promissory Notes to equity.

What are these “market conditions”?
Tight capital markets, slower-than-expected revenue growth with our portfolio businesses, and the overall cash position and distribution schedules of our portfolio businesses.

When will I receive a financial report?
Financial reports will be provided in the next few weeks as part of our asset analysis to determine company and share value.

Do any assets need to be sold in order to pay investors?
No. Our focus will be on growing and scaling our existing business assets to increase market value, revenues, cash flows, and profits. That will lead to future distributions for Norada Capital as well as potential liquidation and/or exit events generating larger cash inflows to redeem Investor shares.

Is the plan to return the investor's original principal or continue to make interest payments as was scheduled for the term of our investment?
Currently, the plan is to redeem investor's shares as soon as it becomes financially feasible. This will be carefully determined so as not to put the company or its investors at unnecessary risk.

Can you share the mechanics of how and when that can be redeemed?
Redemption is the repurchase of your equity as determined by the company. It is not something the investor can choose to do at their option. It is also not based on the Promissory Note maturity date prior to the conversion to equity.

Are the shares liquid to the investor?
Shares are not liquid. They can be redeemed by the company at any time or sold privately to another investor with the approval of Norada Capital. The par value of the investment will be the original principal balance plus any accrued but unpaid interest.

Do we have voting rights?
Your equity ownership is not voting shares/units.

Will there be a summary accounting outlining the equity held by each investor?
Yes, an accounting breakdown of equity held by the investor will be released in a few weeks.

Is the conversion temporary? Will equity be converted back into a promissory note?
A conversion is not temporary. You now own equity in the company. However, as soon as it is financially feasible, the Company will redeem shareholders of their equity interest, which will, again, be calculated on par value or the original principal balance plus any accrued but unpaid interest.

Does Norada Capital have the right to buy back (redeem) the shares at any time?
Yes, Norada Capital has the sole right to redeem your shares by purchasing them at the market value at the time of redemption.

Is anything in the Note enforceable now that my investment is converted to equity?
Your original Note no longer exists once it has been converted to equity. You are now on the company's Capitalization table and are operated by its Operating Agreement.

What accounting or documentation will there be to show the value of my shares?
Financial statements and related documents will be updated and provided to establish the current share value.

Are high interest rates causing this, or are some business assets failing?
It's a combination of tight capital markets, slower-than-expected distributions, and debt service payments that current revenues were not keeping pace with.

Are you able to restructure the loans, albeit at a lower rate?
Third-party refinancing is not an option at this time.

You've been around for a while and been through restructuring, refinancing, and streamlining. What is your estimation of how "temporary" this will be?
A timeline is difficult to establish at this point. Once we have a better idea of our business holdings' future distributions and possible liquidation events, it will be easier to provide a timeline for the redemption of your shares.

What are the strategic steps being taken to maintain solvency and stay in business?
We are taking strategic steps to strengthen the company's financial health, including cost-reduction measures, revenue-generating initiatives, and debt restructuring options. Our team is dedicated to navigating through these challenges and emerging stronger.

Will you provide scheduled updates on the status of Norada Capital?
Yes, there will be regular updates over the coming weeks and months.

We fully recognize that you may have additional questions, and we are more than willing to address them over the coming weeks.

Thank you for your patience, understanding, and continued support. We value your trust and are committed to ensuring our partnership remains strong and beneficial for both parties.

Sincerely,

Marco Santarelli
Norada

[James Hamling]

Quote from @Jon P.:

UPDATE:
....How do others interpret this?....

Complete and utter insanity that anyone would ever have "invested" into such a bonkers thing. 

Because it all reads as legit, as all this was baked in from day 1. Which is NUTZ! 
I can't wrap my head around the fact that people bought into such a thing..... 

It's as if everyone purchased bear-trap underwear because it was trending and ignored that it's giant steel teeth wrapped around your........ 

[Chris Clothier]

Quote from @Chris Seveney:

Quote from @Ian Ippolito:

Quote from @Jon P.:

Keeping this thread back on track about the original topic for those who have invested with Norada and concerned about what to do next, 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...

Jon thanks for sharing.

I was trying to find some public documentation that Ronald Folsum is the CFO of Norada (google search) but came up empty.  If he is, it seems to be kept below the radar.

And Norada website itself does not list it's principals (which is...in my opinion...another red flag when deciding whether or not to invest in a sponsor).

Is there some other way to verify his involvement?

 In one of the posts some of their marketing materials (not sure how old it is) had him listed as CFO but also noted he worked as a fractional CFO. He is not listed on the website anymore under:

Team | Norada Capital Management

 Wow! 

[Michael P.]

Quote from @James Hamling:

Quote from @Jon P.:

UPDATE:
....How do others interpret this?....

Complete and utter insanity that anyone would ever have "invested" into such a bonkers thing. 

Because it all reads as legit, as all this was baked in from day 1. Which is NUTZ! 
I can't wrap my head around the fact that people bought into such a thing..... 

It's as if everyone purchased bear-trap underwear because it was trending and ignored that it's giant steel teeth wrapped around your........ 

Definitely many red flags even from day one. Even before people noticed CFO is banned by SEC. Even if you don’t read the paperwork like Apple terms and conditions, there is a RadioShack logo on their website isn’t that enough?

[Engelo Rumora]

Quote from @James Hamling:

Quote from @Jon P.:

UPDATE:
....How do others interpret this?....

Complete and utter insanity that anyone would ever have "invested" into such a bonkers thing. 

Because it all reads as legit, as all this was baked in from day 1. Which is NUTZ! 
I can't wrap my head around the fact that people bought into such a thing..... 

It's as if everyone purchased bear-trap underwear because it was trending and ignored that it's giant steel teeth wrapped around your........ 

As Chris C mentioned,

Once that rapport is built, people sign blindly.

I trusted and lost $100,000 on an oil fund deal.

Signed blindly...

Invested in a RE tech project.

Lost $250,000

Signed blindly...

It is what it is.

We live, we learn, we grow.

As Jensen Huang said - "Greatness and character are born out of people who suffered"

Wishing everyone all the best and give your family a big kiss as at the end of the day, that's all that matters 🥰

[Jay Hinrichs]

Quote from @Chris Clothier:

Quote from @Chris Seveney:

Quote from @Ian Ippolito:

Quote from @Jon P.:

Keeping this thread back on track about the original topic for those who have invested with Norada and concerned about what to do next, 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...

Jon thanks for sharing.

I was trying to find some public documentation that Ronald Folsum is the CFO of Norada (google search) but came up empty.  If he is, it seems to be kept below the radar.

And Norada website itself does not list it's principals (which is...in my opinion...another red flag when deciding whether or not to invest in a sponsor).

Is there some other way to verify his involvement?

 In one of the posts some of their marketing materials (not sure how old it is) had him listed as CFO but also noted he worked as a fractional CFO. He is not listed on the website anymore under:

Team | Norada Capital Management

 Wow! 

Afternoon Chris..  you like me are probably wondering what the heck is going on. However as I read the post from Jon on the latest from Norada It appears the company has the right at anytime unilaterally to convert the notes to equity and stop interest accrual at the point they rolled the notes up to equity..At least from Norada's point of view.

I suspect it was clearly denoted in their offering and Note.. I also suspect the investors simply glossed over that part or never read it or did not understand what it meant. Again supposition on my part.

So really at this point I don't see how note holders can start any kind of claims as they have not lost anything yet.. maybe they can make a claim about this CFO person.. But as for the deal If what Jon Posted is true and that is the terms the investors agreed to then the deal is just on going and other than investors mad as a wet Hornet it sounds like they are in it for an extended period of time and will hope to recoup over the coming years or decades..

One thing is for certain ( at least IMHO) major litigation and or trying to force them to liquidate now would in all likelihood lead to a massive loss of accrued interest and principal.

[Dewayne C.]

What if you were allowed to invest but were not certified as accredited investor? 

[Jay Hinrichs]

Quote from @Dewayne C.:

What if you were allowed to invest but were not certified as accredited investor? 

I don't know for sure but some of these offerings allow for a certain amount of non accredited investors.  however when you look at the marketing piece it clearly says ONLY ACCREDITED investors.. the question is and others brought it up some offerings the sponsor has to usually get some 3rd party verification ( usually from the investors CPA)  other offerings I have personally seen just have a simple questionnaire and your on the honor system to answer truthfully.  I am  firm believer that on the self certificating of accredited status many investors fib on those.    So if your talking about yourself and having some leverage I would review the offering docs for clarification.

[Chris Seveney]

@Jay Hinrichs

It is up to the GP to verify accredited status. Sec has a lot of language about reasonable steps as guidance to be taken.

Most of our accredited come through an investment advisor who verified it. If it is someone “retail” the way many do it is require documentation from them such as a w2, letter from cpa, tax returns or if it’s net worth then backup to provide that confirmation.

Just someone saying they are accredited does not fly.

[Jay Hinrichs]

Quote from @Chris Seveney:

@Jay Hinrichs

It is up to the GP to verify accredited status. Sec has a lot of language about reasonable steps as guidance to be taken.

Most of our accredited come through an investment advisor who verified it. If it is someone “retail” the way many do it is require documentation from them such as a w2, letter from cpa, tax returns or if it’s net worth then backup to provide that confirmation.

Just someone saying they are accredited does not fly.

Ok I guess the ones I saw that were just simple one page question that you attested to did not fly then.. I know the few investments I have made I did have to have my CpA write a letter stating that Ms. Lori and I meet the  criteria.  

[Jay Hinrichs]

Quote from @Chris Seveney:

@Jay Hinrichs

It is up to the GP to verify accredited status. Sec has a lot of language about reasonable steps as guidance to be taken.

Most of our accredited come through an investment advisor who verified it. If it is someone “retail” the way many do it is require documentation from them such as a w2, letter from cpa, tax returns or if it’s net worth then backup to provide that confirmation.

Just someone saying they are accredited does not fly.

Chris whats your take on the fact According to the NOrada notes etc they can be rolled into equity.. my thought is OK they did that so there is no default they have the right to do it.

[Engelo Rumora]

Quote from @Jay Hinrichs:

Quote from @Chris Seveney:

@Jay Hinrichs

It is up to the GP to verify accredited status. Sec has a lot of language about reasonable steps as guidance to be taken.

Most of our accredited come through an investment advisor who verified it. If it is someone “retail” the way many do it is require documentation from them such as a w2, letter from cpa, tax returns or if it’s net worth then backup to provide that confirmation.

Just someone saying they are accredited does not fly.

Ok I guess the ones I saw that were just simple one page question that you attested to did not fly then.. I know the few investments I have made I did have to have my CpA write a letter stating that Ms. Lori and I meet the  criteria.  

You can get investors to sign off on being accredited even if they aren't.

My CPA can send a letter that I own half of Australia's outback mate lol

[Jon P.]

Quote from @Jay Hinrichs:

Quote from @Chris Clothier:

Quote from @Chris Seveney:

Quote from @Ian Ippolito:

Quote from @Jon P.:

Keeping this thread back on track about the original topic for those who have invested with Norada and concerned about what to do next, 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...

Jon thanks for sharing.

I was trying to find some public documentation that Ronald Folsum is the CFO of Norada (google search) but came up empty.  If he is, it seems to be kept below the radar.

And Norada website itself does not list it's principals (which is...in my opinion...another red flag when deciding whether or not to invest in a sponsor).

Is there some other way to verify his involvement?

 In one of the posts some of their marketing materials (not sure how old it is) had him listed as CFO but also noted he worked as a fractional CFO. He is not listed on the website anymore under:

Team | Norada Capital Management

 Wow! 

Afternoon Chris..  you like me are probably wondering what the heck is going on. However as I read the post from Jon on the latest from Norada It appears the company has the right at anytime unilaterally to convert the notes to equity and stop interest accrual at the point they rolled the notes up to equity..At least from Norada's point of view.

I suspect it was clearly denoted in their offering and Note.. I also suspect the investors simply glossed over that part or never read it or did not understand what it meant. Again supposition on my part.

So really at this point I don't see how note holders can start any kind of claims as they have not lost anything yet.. maybe they can make a claim about this CFO person.. But as for the deal If what Jon Posted is true and that is the terms the investors agreed to then the deal is just on going and other than investors mad as a wet Hornet it sounds like they are in it for an extended period of time and will hope to recoup over the coming years or decades..

One thing is for certain ( at least IMHO) major litigation and or trying to force them to liquidate now would in all likelihood lead to a massive loss of accrued interest and principal.

Massive loss of accrued interest and principal????

Have you seen what the funds were invested in?  The money is already gone in failed business ventures, and really bad ventures for that matter.  There is no positive outcome for anyone here.  People are in a very bad position with Norada and there needs to be some level of accountability for parties involved.

It is quite clear that there is a tremendous amount of things that need to be investigated further to include:

-Improper disclosures and handling of investors capital 

-Conflicting information about accreditation requirements for investors

-Questions around the legality and legitimacy of the actual note documents

-Predatory sales and marketing tactics with false information provided to investors about the investments, returns, etc.

-The fact they are still aggressively raising money with an advertised higher return than before (screams Ponzi & desperation)

-Unlicensed individuals actually selling the investments and receiving commission for it (and other companies referring clients for a fee likely)

-CFO previously convicted of fraudulent activities and banned by SEC from participation with anything related to this type of activity

The list goes on and on.  So regardless whether or not they can actually convert funds to equity taking away all control of people's money, there is still a ton here that needs to be investigated.  Not to mention that equity is worthless in a company that is not worth anything... 

There is no way this doesn't turn into a large lawsuit and investigation based on the seemingly hundreds of people that invested in this. 

[Chris Seveney]

@Jay Hinrichs

It comes down to what is in the subscription agreement and if allowed to do that then you are correct there is no default.

While everyone is screaming fraud and this should be investigated - if it does it will take years to investigate (I also doubt it will but who knows)

BUT I don’t think people realize for a Reg D 506c the level of disclosures is extremely low.

As I mentioned you do not even need a PPM for a 506c.

The amount of speculation currently ongoing is wild IMHO. Why not have someone share their subscription agreement they signed and that would be a good tell on things.

End of day, it’s easy to play Monday morning qb and look at this as just a really interesting investment - which to me was like putting money on black or red investing in defaulted companies

and this sponsor is now pushing new product about investing in conferences or something along those lines. It’s not real estate.

This has been discussed on this site at fathom, know what you’re investing in and hire an attorney to review prior to investing. How many LP’s who are on here mentioning lawsuits actually did that?

The sec has warnings all over the place about offerings with high returns. I mentioned this in another post of a company offering 40% returns and people were investing heavily in it- now I heard their funds were frozen….

If it’s too good to be true, it is or you don’t understand the risk.