“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.
