​Have you lost money in your investments? This guide will help you determine what legal remedies are available to you to recoup your losses.

1. INTRO: Do I Have A Case?Many of my clients call me by chance after a brief read online that informs them that there are legal remedies for investor losses. If it weren't for doing an online search, they would have never thought of contacting an attorney to evaluate their potential investor claims. While online guides are a great tool for educating people on investment fraud, it is important to keep in mind that the best way to determine if you actually have a viable case is to consult a securities attorney. 
   
   The below steps will help you determine if you have a case, however, consult with an attorney even if you do not think the facts in your case completely match the information listed below. Following the steps below will help you get all the information together for when you consult with an attorney.
2. Step 1: Gather your investment statements and determine your losses.Best case scenario, you have a clear loss shown in your statements showing the difference between your principle amount invested and the ending balance. However, losses are not always that clear. Many of my clients have an ending balance that is higher than the principle amount invested, however, they still had a case against the investment firm because their broker's actions resulted in losses from the peak of their account value. In some cases, the statements show little to no loss in the principle amount, however, the broker made thousands off of trading fees while making no profits for the client.
3. Step 2: Gather any and all contracts and investment flyers or brochures.In many investment fraud cases, investors are sold on a single investment on which they lose money. Also, contracts will show what kind of investments you were expecting your broker to get you into (e.g. high vs low risk and yield). You should also look for an arbitration clause, which is usually a more cost-effective forum for hearing your case.
4. Step 3: Collect all correspondence with your broker.This includes emails, text messages, and any other documented communication. More often than not, investors were solicited by their broker and there are corresponding communications to show the solicitation and representations made to the investor.
5. Step 4: Call a securities and investment fraud attorney.While there are forums and other means available for investors to file a complaint against a broker, it would be wise to at least call and discuss with an attorney first. Generally, consultations are usually free in order to evaluate the strength of a case. Your best bet will be to retain an attorney who is experienced in recovering investor losses. Many attorneys will represent you for a contingency fee, which is a percentage of whatever they recover for you.
6. CONCLUSION: What Legal Remedies Are Available To Me?There are many avenues investors can take to recoup their investment losses. One of the most cost-effective methods in pursuing a legal remedy is through FINRA arbitration services. FINRA is the Financial Industry Regulatory Authority. They are a Self-Regulatory Organization (SRO). An SRO is not a government agency, however, they do create and enforce laws and regulations in the financial industry. Brokers and Dealers pay membership fees to FINRA, which includes the use of FINRA arbitration forums to resolve disputes. FINRA arbitration forums are usually held close to where the parties to the case reside. The arbitration is heard before a panel of arbitrators who are usually industry professionals. 
   
   While litigation is another legal remedy that may be sought by an investor, it is often times more costly and time consuming than arbitration. The litigation costs associated with depositions and drafting multiple motions don't apply to arbitration because it is a simplified litigation process. The steps to a FINRA arbitration are usually 1) filing a claim, 2) conducting discovery, 3) holding a mediation or other settlement process, and 4) attend an arbitration hearing (if the case is not settled). 
   
   Every case is different, and it is important to consider the advice of an attorney before taking any action against a broker. The aforementioned information in this article is a rough guide on what avenues may be available to investors. This article should not be understood to be legal advice. Following the information listed above should help you and an attorney efficiently evaluate your situation and pursue your interests accordingly.

Additional resources provided by the author
The Financial Industry Regulatory Authority (FINRA) website provides a lot of information for investors who have lost money in investments due to the actions of their broker. 

Seattle Investment Law Group, PLLC. provides Nation-wide legal services for securities and investment matters.

An Qualified Opportunity Zone Fund ("QOF") is mechanically very similar to a private equity fund. The various regulations under the SEC and IRS will still apply. However, there are few more restrictions to how a QOF can operate in order to stay qualified. 

From what I have seen there are really three types of people interested in starting a QOF:

1) Fund Managers - Many general partners of various funds have been intrigued by the opportunity zone regulations and have already set up the various entities to create a QOF. These structures are a lot more complex than the opportunity zone regulations make it seem and it is highly recommended that a professional is consulted in structuring it properly. This is where the various SEC and IRS regulations apply. 

2) Taxpayers - Some people are interested in selling properties and are looking for various ways to maximize their tax benefits by investing their capital gains into a QOF. The structure for this is relatively straight forward because the IRS recently said that a QOF could just be an LLC. However, the various restrictions in the new tax code applies. More will be discussed below. 

3) Real Estate Developers and Business Owners - This is where many attorneys are having to tell their clients that starting a QOF may be difficult unless they are willing to get creative. Many real estate developers own properties in opportunity zones and are interested using their own capital gains to fund projects. The real problem here is the "related persons" rule and its restriction on allowing a QOF to invest in a property where over 20% of its ownership is by a common partner or even a relative. Without further guidance from the IRS, a QOF would only make sense for a real estate developer if they are interested in investing their capital gains into a project they don't own or they are willing to accept outside investors where they own at least 80% of the project. Business owners can also enjoy the benefits of a QOF because they could potentially invest capital gains into their business an enjoy tax-free income after 10 years. However, there are some hurdles that would need to be dealt with before a QOF can be deemed a correct strategy. 

How is a QOF structured?

Many QOFs are being structured similar to how a private equity fund would. The QOF is structured as a Limited Partnership in order to easily accept investors as limited partners. The General Partner of the QOF would be an LLC. The QOF would then invest into one or more portfolio companies structured as Limited Partnerships. The portfolio companies would technically be a Qualified Opportunity Zone Business. The benefit to investing funds into portfolio companies is that the QOF will have 31 months to utilize the funds instead of only 6 months if they were to invest directly from the QOF into a property. This gives the QOF more flexibility when their investments include construction projects that are typically lengthy in duration. 

A QOF could be started as a simple LLC. However, such a simple set up could lead to a failure to maintain a QOF status and may result in large fees and penalties. It is important to consult a professional before starting a QOF. ​

The short answer... Yes!

The Tax Cuts and Jobs Act of 2017 has brought on a lot of changes to the tax code. Perhaps one of the most interesting changes was the implementation of opportunity zones.  According to the IRS, the creation of opportunity zones was designed to spur investment in distressed communities throughout the country through tax benefits.  However, taxpayers are still awaiting much needed guidance from the IRS. 

For now we do know what the tax incentives are for taxpayers. There are two main benefits to investing in an opportunity zone.

1) Tax-Free Income - A taxpayer will enjoy tax-free income off of any returns from investing capital gains into a qualified opportunity zone fund ("QOF"). All a taxpayer has to do is invest their capital gains into a QOF by December 31, 2026 and keep it there for at least 10 years. To further elaborate, a taxpayer would have 180 days to invest their capital gains from the sale of a property to an "unrelated person" into a QOF. So technically a taxpayer will have until June of 2027 to invest their capital gains from a sale that occurred no later than December 31, 2026. The related persons rules are a little complex and a professional should be consulted. 

2) 15% Decrease in Capital Gains Tax - A taxpayer will also enjoy a step up in their basis for the property they sold. Any capital gains invested in a QOF will be taxed in the year 2026. This is because the ability to invest in a QOF and receive the tax benefits terminates on December 31, 2026. Therefore, a taxpayer will be taxed on their capital gain on April 15, 2027. If a taxpayer invests their capital gains into a QOF and defers tax, then they will receive a 10% increase in their basis they invested five years before December 31, 2026 deadline, and another 5% increase if they invested seven years before deadline. For example, If a taxpayer sold their property an received $1 million in capital gains, then they will only pay capital gains tax in 2026 on $900,000 if they invested in a QOF by 2021, or capital gains tax on $850,000 if by 2019. 

So are opportunity zones worth they hype? Yes, they are. A taxpayer could potentially make tax-free income off their investment in a QOF after 10 years. Imagine if you invested $1 million of capital gains into a start-up and ten years later you made very profitable return and it is all tax-free. 

However, the real question is, will investing in opportunity zones be attractive to taxpayers. While the main drive behind opportunity zones was increasing investments in low-income areas, investors still need to see the potential for a valuable return in their investments. Perhaps the tax incentives will be enough to help direct cash flow into opportunity zones. ​