A federal judge in the Southern District of New York has granted preliminary approval for a $9 million settlement in the class action against Yieldstreet Inc., a digital investment platform specializing in alternative investments. This case highlights how deceptive practices in promoting high-risk investments while downplaying potential losses can severely impact investors, potentially leading to substantial financial harm and erosion of retirement savings.
How Did We Get Here?
In 2020, investors filed a class action lawsuit after experiencing substantial losses from Yieldstreet’s alternative investment products. The heart of the matter lies in how these investments were marketed – presented as low-risk opportunities while allegedly failing to provide full disclosure about the true characteristics of the underlying assets and their associated risks. Specifically, investors claim that Yieldstreet marketed complex financial products, including vessel deconstruction loans and marine finance investments, without adequately disclosing the high-risk aspect of these investments or the potential for complete loss of principal.
We Have Recovered Over
$350 Million for Our Clients Nationwide.
What Does the Settlement Mean for Investors?
Under this agreement, Yieldstreet will set up a $6.2 million cash fund and waive up to $2.75 million in fees for affected investors who purchased certain investment products between 2018 and 2020. If you’re one of the approximately 1,200 investors who invested in specific Yieldstreet offerings during this period, particularly in their marine vessel portfolios and other alternative investment products, you may be eligible for compensation. The settlement aims to address losses suffered due to alleged misrepresentations and inadequate risk disclosures.
How Will the Settlement Funds Be Distributed?
The distribution formula takes into account several key factors that could affect your recovery, with a detailed calculation method designed to ensure you get the right compensation using the following factors:
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Your total investment amount across all eligible Yieldstreet products
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When you made your investments, with specific consideration for investments made during the class period of 2018-2020
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Which specific offerings you participated in, particularly focusing on the marine vessel portfolios and other affected investment products
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The extent of your actual losses, including both principal losses and unrealized returns
Important Steps for Affected Investors
If you’re an eligible class member, you’ll receive detailed instructions about the settlement and claim submission process through a court-appointed claims administrator. We strongly encourage you to carefully review any settlement notices and submit all required documentation, including proof of investment and loss documentation, by the specified deadlines to protect your rights to recovery. The claim submission process will require detailed records of your investments and transactions.
Why Does This Settlement Matter for Investor Protection?
As part of this settlement, Yieldstreet has committed to improving its disclosure practices and risk assessment procedures. While these changes aim to provide better transparency moving forward, it’s crucial for investors to remain vigilant and fully understand investment risks before committing their funds. The settlement establishes new standards for alternative investment platforms regarding risk disclosure, due diligence procedures, and marketing practices.
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What Should Yieldstreet Investors Do Next?
This settlement represents a significant milestone in alternative investment platform regulation. We’ve seen how proper risk disclosure and transparent marketing practices are fundamental for protecting investor interests, particularly in the growing alternative investment sector where complex financial products are increasingly accessible to retail investors.
This preliminary settlement approval marks a significant step toward justice for affected Yieldstreet investors. If you believe you may be eligible for compensation under this settlement, we encourage you to stay informed about the process and take prompt action to participate in the recovery of your losses. Our team at Meyer Wilson is here to help you understand your rights and options throughout this process, including assistance with claim documentation and submission procedures.
Recovering Losses Caused by Investment Misconduct.