Investor Lawyers Blog
Investors in ATEL 14 LLC (“ATEL 14,” or the “Company”), or a similar illiquid investment product, may be able to recover losses on their investment through FINRA arbitration, or in some instances, securities litigation. The attorneys at Law Office of Christopher J. Gray, P.C. possess considerable experience in representing aggrieved investors who have lost money due to unsuitable recommendations to purchase inappropriate securities, including illiquid non-traded investment products that do not trade on a national securities exchange.
According to publicly available SEC filings (from March 2017), ATEL 14 was formed as a California LLC in April 2009, for the purpose of funding equipment financing and acquiring equipment to engage in equipment leasing and sales activities. The Company’s primary investment objective is to acquire investments primarily in low-technology, low-obsolescence equipment such as the core operating equipment used by companies in the manufacturing, mining, and transportation industries. ATEL 14 conducted a public offering of 15,000,000 Limited Liability Company Units (“Units”) at a price of $10 per Unit. As of December 31, 2016, cumulative gross contributions to ATEL 14 (net of distributions paid and syndication costs) totaled $83.7 million – as of this same date, 8,316,662 Units were issued and outstanding.
Recently, Units of ATEL 14 were listed for sale on Central Trade & Transfer – which provides a secondary market for certain illiquid investments including private placements in LLCs such as ATEL 14 – for $3.10 per Unit. It would appear this pricing represents a significant loss for many investors who purchased Units through the IPO at $10 per Unit. Additionally, investors in ATEL 14 may not have fully appreciated the risk associated with the 9% sales commission brokers earned for recommending purchase of ATEL 14 Units to their clients.
While your broker may have touted an investment in ATEL 14 as a ‘safe’ nontraditional investment that lacked the volatility associated with the stock market, such an investment comes with substantial risks. If your broker or financial advisor recommended an investment in ATEL 14 without fully informing you of these risks, including the illiquid nature of the investment and significant up-front commission to the broker, we encourage you to contact our office to further discuss your legal rights and potential remedies to recover your losses. Brokers and broker-dealers are required to perform adequate due diligence on any investment they recommend and must seek to ensure that all recommendations made are suitable for that investor in light of his or her age, net worth and income, risk profile, investment experience, and sophistication with investing.
In addition to the risk factors described above concerning illiquidity and high fees, an investment in ATEL 14 carries additional risks. These risks include, but are not limited to:
- No guarantee by the Company that distributions will be made, or that the distributions will not include return of investors’ capital;
- Conflicts of interest may well exist as between ATEL 14 (the fund) and the fund manager, particularly in light of fees to be earned by the manager of the fund;
- Because no public market exists for ATEL 14 Units, investors will not only be faced with a liquidity issue, but will also likely face pricing inefficiency (meaning that even if an investor can sell, or redeem, his or her Units, the Units may well be priced at a significant discount to their purported Net Asset Value (“NAV”).
Investors in ATEL 14 – or other similar non-traded investment products, including non-traded REITs and non-traded BDCs – who wish to discuss a possible legal claim may contact our office at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.