Investors who invested in Energae LP and/or I-Lenders, LLC on the recommendation of Darrell Duane Smith may be able to recover their losses through FINRA arbitration.
On April 10, 2013, the Iowa Department of Insurance issued a cease and desist order against Darrell D. Smith, Energae LP, and I-Lenders LLC (a/k/a Interested Investors, LLC) to cease and desist from, among other things, the offer or sale of investments in Energae, LP and/or I-Lenders, LLC.
According to the Department, Darrell D. Smith persuaded multiple consumers, some of whom were insurance clients of Darrell D. Smith, to invest in Energae LP, and/or I-Lenders, LLC. Darrell D. Smith allegedly told the investors (several of which were residents and/or farmers in the Red River Valley) that they should invest in a “green energy” company that was in the business of manufacturing sugar beet ethanol. Over time, Darrell D. Smith told investors that they should invest in Energae, LP – a venture capital company that invested in a variety of “green energy” and biofuel companies. Darrell Smith allegedly represented to the investors that they should invest in Energae, LP and/or I-Lenders, LLC for both growth and for the tax credits that they would be able to receive.
At the time that Darrell Duane Smith recommended that his customers invest in Energae, LP and/or I-Lenders, Darrell Smith was allegedly familiar with the portfolios of the Energae, LP and/or I-Lenders, LLC investors because of the previous relationship Darrell Smith had with them as their registered securities representative and/or investment advisor.
According to the cease and desist order, from 2008 through present, Darrell D. Smith allegedly transferred money out of former insurance client’s accounts without their knowledge to invest in Energae, LP and/or I-Lenders. These investors had no knowledge of these investments. The Division also has alleged that it believes Darrell D. Smith has converted investor funds for his own personal use.
As a result of his alleged misconduct, on July 15, 2013, Darrell Duane Smith consented to an Order whereby he was fined $5,000, had his securities and insurance licenses permanently revoked by the Iowa Department of Insurance, and was banned from ever applying for his securities licenses again.
Generally speaking, brokerage firms like those that Darrell D. Smith were registered with have a duty to properly supervise their employees and registered representatives so that they only recommend investments to their customers that are approved by the brokerage firm, and suitable for the investor. Brokerage firms that fail to properly supervise their representatives can be held liable for their failure to do so. Moreover, brokerage firms can in many instances be held jointly and severally liable for the misconduct of their brokers and registered representatives.
If you have suffered losses investing with Darrell Duane Smith in Energae, LP and/or I-Lenders, LLC, you may be able to recover your losses through FINRA arbitration. Please contact the firm today for a FREE, NO OBLIGATION CONSULTATION to discuss your investment loss recovery options.
