Core Insights

1. Unfiltered Reality: The Ninth Circuit Court of Appeals has overturned a lower court’s dismissal, reviving a class action against Grant Cardone and Cardone Capital for allegedly misleading “everyday investors” with promises of a 15% annual return.
2. Predatory Conduct Spotlight: Despite regulatory warnings, Cardone continued to broadcast his bold 15% return claims on social media, targeting unsophisticated investors—a tactic the appellate court called into question.
3. Broad Implications: The ruling not only breathes new life into Christine Pino’s case, but also opens the door for other investors to join a potential class action, casting a long legal shadow over Cardone’s business empire.

By Samuel Lopez – USA Herald

The Legal Earthquake Shaking Cardone Capital

LOS ANGELES, CA - It’s not every day that the facade of a celebrity investor gets publicly peeled back in federal court. But on June 10, 2025, the United States Court of Appeals for the Ninth Circuit handed down an opinion that not only reverses the lower court’s dismissal of a securities class action against Grant Cardone and his business entities—it also offers a cautionary tale for every Instagram “guru” promising financial miracles.

“You’re Gonna Walk Away with a 15% Annualized Return”

That was the pitch Cardone delivered directly to his audience on Instagram and YouTube. The appellate opinion sets the scene:

“Grant Cardone and the real estate syndicator he founded projected just such an investment return online to unsophisticated investors. Cardone shared his offerings on social media, boasting on Instagram that investors could double their money and telling viewers on YouTube: ‘[Y]ou’re gonna walk away with a 15% annualized return. If I’m in that deal for 10 years, you’re gonna earn 150%... You can tell the SEC that’s what I said it would be... some people call me Nostradamus, because I’m predicting the future dude, this is what’s gonna happen.’”
(See PINO V. CARDONE CAPITAL, LLC, pp. 4-5)

The Real Target: Unsophisticated Investors

The court makes it clear who Cardone’s marketing machine was aimed at:

“Cardone Capital put it, these funds offered an investment opportunity for the ‘everyday investor.’ The Funds made offerings to investors under Regulation A... which allows for the sale of securities through crowdfunding and reduces reporting and accounting requirements.”
(See p. 5)

These “unaccredited investors” are, by SEC definition, individuals who haven’t met the sophistication or wealth criteria to be considered professional investors. In short, they are ordinary people—precisely the demographic most vulnerable to slick social media pitches.

Lawsuit Origins and Legal Journey

After investing in Cardone’s real estate funds, Luis Pino, later succeeded by his daughter Christine Pino, after Mr. Pino’s passing, filed a putative class action alleging violations of the Securities Act based on Cardone’s misstatements and omissions in both official offering materials and online marketing. The lower court initially sided with Cardone, but the Ninth Circuit saw it differently.

“Doing so here, Pino has sufficiently stated claims under §§ 12(a)(2) and 15 of the Securities Act of 1933, 15 U.S.C. § 77a et seq. (the ‘Act’ or ‘Securities Act’). We reverse the district court’s grant of Cardone’s motion to dismiss.”
(See Opinion)

Cardone’s 15% Promise: More Than Just “Opinion”?

A crucial point in the court’s ruling revolves around Cardone’s continued claims of a 15% internal rate of return (IRR), even after the SEC explicitly told him to remove these numbers:

“The SEC reviewed the offer and in a letter to Cardone stated these projections lacked backing and should be removed. Cardone pushed back on other criticisms from the SEC, but not this one, suggesting Cardone did not truly believe its own projections and lacked evidence to rebut the SEC. Even so, Cardone continued to repeat the IRR and distribution projections in other communications to would-be investors on social media.”
(See p. 12)

The court notes that this sequence “evinces Cardone’s subjective disbelief” in his own projections—meeting the legal test that a statement is actionable if the speaker did not honestly believe it was true at the time it was made.

The Court’s Take on “Material Omissions”

Not only did Cardone allegedly make knowingly false claims, but he also failed to disclose that the SEC required him to remove those very claims. The Ninth Circuit decisively states:

“Pino sufficiently alleges that Cardone’s failure to disclose the SEC letter (which requested that Cardone remove the projected rates of return and distributions) supports an omission claim under Omnicare... By its nature, a misleading omission suggests that a contrary fact could exist and may have been disclosed elsewhere, but not as part of the statement in question. Indeed, ‘that truthful information is available elsewhere does not relieve a defendant from liability for misrepresentations in a given filing or statement.’”
(See p. 14, citing Miller, 519 F.3d at 887 n.2)

The kicker? The court held that even if this SEC letter was publicly available, “constructive knowledge does not bar recovery for § 12 claims”—meaning ordinary investors don’t lose their rights simply because the information was buried in regulatory databases or available somewhere online.

Debt Obligations: The “Who Owes What?” Problem

A separate but critical allegation centers on Cardone’s claim that he—not investors—was responsible for the debt of the funds. The court called this misleading and “material,” explaining:

“There would be fewer costs for investors and thus greater returns if Cardone were responsible for the debt... A potential change in costs and returns thus could alter the ‘total mix’ of available information in the eyes of a reasonable investor.”
(See p. 15)

Why This Matters: Class Action Potential and Industry Impact

With the Ninth Circuit’s decision, the case goes back to the lower court, not just for Christine Pino, but for a class of similarly situated investors. This sets a powerful precedent for how courts might treat social media investment pitches—and signals real legal peril for Cardone and others using similar marketing tactics.

As the opinion makes clear, “Section 12(a)(2) is unique as ‘a virtually absolute liability provision that does not require an allegation that defendants possessed scienter.’”
(See p. 11)

This means intent to defraud isn’t even necessary—misleading claims or critical omissions are enough to land an influencer or investment promoter in court.

What Comes Next?

If you invested with Grant Cardone based on promises you saw on Instagram or YouTube, this ruling means your legal rights are very much alive. Expect the next phase to focus on class certification and discovery—where even more of Cardone’s business practices could be exposed.

As someone who tracks both the legal sector and the wild frontiers of influencer finance, this appellate ruling is a game-changer. It demonstrates that the courts are catching up to the realities of modern investment marketing—where one viral post can reach millions, and one unchecked promise can harm thousands of “everyday” investors.

“This ruling isn’t just about one influencer—it’s a wake-up call for the entire industry. Courts are making it clear: empty promises and social media hype will not shield anyone from accountability.”— Samuel Lopez, Senior Legal Analyst, USA Herald

For deeper insights and exclusive legal analyses, join me on Patreon at Legal Insights and Strategies by Samuel Lopez.

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Sources:

• Read the full Ninth Circuit opinion
• Prior USA Herald coverage: Grant Cardone’s 15% Investment Hype Faces Major Legal Reversal