Maddox Hargett and Caruso is investigating claims against various DeepRoot Funds third parties to recoup losses. The Securities and Exchange Commission filed a complaint on August 20, 2021, alleging that Robert J. Mueller, DeepRoot Funds, LLC, Policy Services, Inc., and several other “relief defendants” abused their roles as investment advisors to the two primary DeepRoot funds, the 575 Fund, LLC, and the Growth Runs Deep Fund, LLC. The SEC contends that Mueller used these monies as his personal piggy bank, paying for weddings for wives 2 and 3 as well as paying for his divorce from wife 2. Investors are most likely looking at a total loss of approximately $58 million. Because the SEC has already pursued Mueller and the Funds, investors must search for viable third parties who may be liable for damages.
The first and most apparent target for investors in this situation would be the financial or investing advisor who initially solicited the transactions. It’s clear that your RIA or broker recruited you to invest in DeepRoot, and that this solicitation was a breach of fiduciary duty. With a straight face, RIAs will rhetorically ask clients in similar cases, “How could we know?” The investment advisor is paid to know because they have the necessary licenses, training, education, and statutory fiduciary duties to their clients. Whether your advisor is a FINRA-registered broker or a Registered Investment Advisor (RIA), they owe it to their clients to grasp and know the products they sell. These DeepRoot Funds appeared to be unregistered, private, unproven, and speculative private-investment plays on the surface. Almost every retail investor in America would be disqualified from investing in these funds based on the information available right now.
To put it clearly, fiduciary investment advisors are required by law to comprehend the risks and characteristics of the products they recommend to their customers. Failure to do so is a breach of a fundamental and basic responsibility. For this fundamental violation of duty, investment advisors may be held accountable to their clients. What are they expected to do if they don’t know? They are paid to know and are licensed experts who are required to know if the fund they are suggesting utilizes investor cash to invest properly or, as in the case of DeepRoot, utilized investor monies to pay for divorces, weddings, and other abuses.
There could be more targets in this area as well. Accounting firms who were auditing DeepRoot’s financials should have understood how investor funds were being misappropriated. Banks utilized by DeepRoot, law firms, and any other professionals hired to conduct services for DeepRoot and their investors are all possible targets.
Maddox Hargett & Caruso, P.C. represents investors nationwide who are trying to recover their DeepRoot losses. If your financial advisor recommended that you invest in DeepRoot Funds, we may be able to help you recover some or most of your losses. You can call or email our senior partner Mark Maddox to have your potential case evaluated at no charge. Please call 317-598-2043 or email him at mmaddox@mhclaw.com