Originally Syndicated on June 6, 2024 @ 7:01 am
About Cherokee Investment Partners LLC
Private investment firm Cherokee Investment Partners LLC is in business. Executive buyouts, acquisitions, recapitalizations, limits, and a variety of other commercial transactions are the areas of expertise for this corporation.
The majority of Cherokee Investment Partners LLC’s clientele are Americans. It is an investment company that focuses on producing superior social, economic, and environmental returns by combining capital with creativity, experience, and resolve.
Throughout the United States, Canada, and Europe, Cherokee Investment Partners LLC primarily made investments in over 550 brownfield—environmentally contaminated—real estate properties. As the only known private equity manager in the world with ISO 14001 certification, this business has committed more than $2 billion to five investment funds since 1996.
Approximately 550 environmentally contaminated, or brownfield, real estate properties spread across the US, Canada, and Europe were the main investments made by Cherokee Investment Partners LLC. As the only ISO 14001 qualified private equity supervisor in the world, this company handled five venture capital funds with a combined value of over $2 billion until 1996.
Cherokee Investment Partners LLC has thus been the target of multiple litigation.
A Case Study of Cherokee Investment Partners LLC
It is reasonable, in the opinion of the Securities and Exchange Commission (SEC), that no further action be taken in relation to Cherokee Investment Partners LLC & Cherokee Advisers.
In advance of the commencement of these proceedings, respondents submitted a Notice of Settlement, which the Court of Appeal has chosen to accept.
The Commission draws a conclusion based on this Order and the Respondents’ Proposal.
In brief
This lawsuit is the result of two connected private equity fund managers improperly distributing to clients assets certain consulting, legal, and compliance-related costs they incurred while depending on financial advisers, in addition to other relevant compliance issues.
The equity investment manager Cherokee Investment Partners LLC has overseen two private equity real estate funds, Cherokee Investment Partners II, L.P. and Cherokee Investment Partners III Parallel Fund, L.P., with expenditures on economically tarnished assets at all relevant dates.
Of these expenses, Cherokee Investment Partners LLC charged $455,698 to the funds and demanded payment from the funds.
The agreements did not address the funds being billed for the advisers’ compliance or legal fees, even though the limited liability company commitments for the funds stated that the funds would be used for costs incurred in the general partner’s good assessment as a result of the funds’ operations and tasks, such as legal and contacting fees.
In order to prevent Advisers Act violations brought on by the allocation of expenses to the funds, Cherokee Investment Partners LLC neglected to put in place written procedures or guidelines.
The participants and Related Entities
Founded in 1993, CIP is a Delaware limited partnership corporation headquartered in Raleigh, North Carolina. Since March 2012, CIP, an independent investment adviser, has held trusteeships for Fund II and Fund III and has been licensed by the Securities and Exchange Commission.
CA is a North Carolina-based Delaware limited liability company that was established in 2005 and has its main office in Raleigh. The administrator of Fund IV has always been CA, a qualified fund adviser.
Founded in 1998, Fund II is a Delaware limited partnership and private equity fund that aims to purchase and restore environmentally contaminated land. It has received cash pledges of about $250 million from 21 investors, some of whom are significant investors.
Founded in 2002, Fund III is a Delaware limited partnership and private equity corporation that aims to purchase and remediate environmentally contaminated property. It has raised around $620 million from fourteen owners, many of whom are significant investors.
Founded in 2005, Fund IV is a Delaware limited partnership and private equity business that aims to purchase and remediate ecologically contaminated property. Its stockholders have committed approximately $625 million in cash.
Details
By the then-imminent requirements of the Dodd-Frank Act, Cherokee Investment Partners LLC began planning to register with the Commission as an investment adviser under the Adviser Act.
The funds were assigned to Cherokee Investment Partners LLC, which compelled the funds to pay $171,232 in compliance-related expenses incurred during the qualification process for registration as a financial adviser under the Advisers Act or to comply with legal obligations arising from registration.
Violation
Financial advisers are prohibited by the Advisers Act from engaging in any arrangement, action, or mode of operation that deceives a present or potential client, either directly or through a middleman.
Cherokee Investment Partners LLC’s Assistance and Corrective Actions
The Federal Trade Commission considered the Respondent’s cooperation with the Commissioner’s staff and remedial measures before accepting the Cherokee Investment Partners LLC offering.
A Case Study of Cherokee Investment Partners LLC
The complaint states that Cherokee Investment Partners LLC failed to comply with the Advisers Act’s reporting requirements. The main requirement is that a minimum of $150 million in hidden business holdings be managed by chosen financial advisors. From 2012 to 2016, Cherokee was the subject of a lawsuit; nevertheless, throughout that time, it did not keep a legal record.
Violation
After the fiscal years 2012, 2013, 2014, and so forth, this firm, which was registered as an investment adviser with the Securities and Exchange Commission, managed at least $150 million in funds for its private portfolio.
The Corrective Actions of Cherokee Investment Partners LLC
Within ten days after the entry of this Order, Cherokee Investment Partners LLC shall submit a $75,000 civil money penalty to the Securities and Exchange Commission (SEC) for deposit into the United States general fund.
The Bottom Line
A financial company called Cherokee Investment Partners LLC helps to combine capital with know-how, creativity, and resolve to deliver exceptional financial and environmental results.
Nonetheless, it has many lawsuits pending against specific financial advisors for failure to disclose material information regarding at least $150 million in private fund assets under administration.
