All Forum Posts by: 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 :

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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

@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.

@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 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!

Anyone with Tardus on this thread invest with Norada?  I know Norada investments were heavily recommended by the Tardus coaches. 

If so, you might want to read this:

https://www.biggerpockets.com/forums/960/topics/1196567-nora...

https://www.biggerpockets.com/forums/70/topics/1198271-bewar...

https://www.biggerpockets.com/forums/960/topics/913717-inves...

Lastly, I believe the web of involvement extends to many other financial parties as well.  It will be interesting to see how all this plays out during an investigation, but I sure hope that the money can be followed for the investors' sake that were damaged here.

I've also been made aware that a company, Tardus Wealth Strategies, who "coaches investors on financial independence in 10 years or less" was heavily promoting the Norada fund to unaccredited investors and was also heavily promoting Ron Fossum.  It sounds like there was multiple webinars conducted by Ron Fossum and Marco supported by Tardus to hundreds of investors that also invested heavily in the Norada fund.  I believe there are many groups that helped promote the Norada fund without doing any preliminary research on what the investments entailed or the criminal history of the people involved putting together the "investment opportunity."  I think this is something bigger than many of us realize, but this is just the beginning of the house of cards.  It appears Norada has been sending out unaudited balance sheets to investors asking about their financials that shows over $100M valuation in these seemingly bankrupt businesses they invested in.

@Jay Hinrichs if fraud is identified, then there would be damage recovery for parties including possible attorney fees.  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!

I think it's safe to assume that all investors' capital is gone here. 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...

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...

 @Jay Hinrichs SEC filings are public information, so anyone can look this up, which I did.  Just do a simple google search.

This was filed as a 506(c) in 2020, which a 506(c) is only available to accredited investors only and has strict rules around solicitation!  I have been on the email list for some time and no advertisement ever mentioned anything about accredited investor status.  Here are the key points that led me to believe the SEC to be inappropriately filed and inappropriately executed leading to this disaster:

-This was clearly solicited to unaccredited investors with no mention of accreditation status.  It appears that many that invested are not accredited investors.  @Paula Impala, are you an accredited investor, or were you ever asked about this prior to giving them money?

-It is stated that this would not last more than one year.  They first filed this and sold it in 2020, but it's still ongoing now in 2024 as they continue to solicit it.

-It is listed as a debt security, which seems to be inappropriate as this was not a debt offering and they are offering equity to investors.  Equity was not identified in the SEC filing even though it's a clear option.

-Looks like they already sold this to 59 investors for $4M at time of filing.  

Now, I'm no SEC expert, but on the surface, there seems to be quite a bit that doesn't line up here.

The OP on this thread came here asking for help and suggestions on what to do.  I see a ton of posting about unrelated information.  It would be nice if the people that seem to live on these forum threads would actually chime in to offer some advice for the OP along with anyone else that invested in these funds instead of just commenting on how crappy of an offering this was!