Over the last few years, ICON has created a number of investment funds which according to their own website are aimed at investing in “innovative investment products to individual and institutional investors through publicly registered programs, private funds and separately managed accounts.” These funds according to Bloomberg invest in all sorts of equipment, ranging from marine vessel to mining equipment and rail support equipment and everything in between. In 2005, the company launched the ICON Leasing Fund 11, while in 2007 they proceeded to launch the ICON Leasing fund 12. Sadly, it seems that over the last few years, these funds haven’t been doing very well, which has lead to massive losses in the value of the funds. ICON Elevens year to end report for 2011 stipulates that the fund faced a net loss of over $25 million with the fund losing over 50% if its total asset value. This is a truly significant year to year loss in the value of the asset base. Furthermore, although not as severe, ICON Twelve has had a drop in net income of over 75% year to year from 2010 to 2011. This, added with the fact that the total amount of assets dropped by 18% would mean that the fund might be in trouble.
There is risk attached to these funds, as the companies own year to year reports stipulate, but the problem seems to arise form the fact that it would appear that some brokers failed to properly notify their clients of these risks. Furthermore, these funds are surrounded by a lot of uncertainty, ICON themselves state that “Uncertainties associated with the equipment leasing and financing industry may have an adverse effect on our business and may adversely affect our ability to give you any economic return from our Shares or a complete return of your capital”. This would indicate that these funds may be too risky for many people who would prefer safer, stable investments. When a broker fails to provide all the information to his client, it is called Misrepresentation and/or Omission. Put plainly, this occurs when a broker fails to provide or properly convey the true risk associated with a particular investment product. This might entitle the investor to have a claim which could potentially lead to a recovery of the losses which occurred by investing in the ICON funds.
Sonn & Erez continues to zealously represent investors who are victims of misrepresentation and omissions. Sadly, this occurs more often than one would like and brokers often times receive incentives to sell particular products. This could lead to facts being hidden, and as a result people with low risk tolerances might be told to invest in products which do not match their risk profiles. If you believe that a financial professional has abused your trust and confidence in this manner, please call our firm. Sonn & Erez has represented hundreds of investors in disputes against all major brokerage firms and banks in an effort to ensure that their rights are upheld.