YieldStreet, an online platform that offers access to alternative investments in commercial real estate and marine projects, warns that its offerings are riskier than stocks or bonds, and now some of its investors are learning how risky that can be. So reports Bloomberg Businessweek.
For one set of marine loans worth $89.2 million, investors never received the principal payments. YieldStreet gave “six months of excuses and extensions [for] reasons ranging from ‘bad weather’ to ‘new banking regulations in India’ before informing investors that they suspected fraud,” a group of YieldStreet investors recently wrote in a letter to company executives.
YieldStreet has filed a federal lawsuit against the asset manager that acted as the loan servicer on the deals. A YieldStreet spokesperson told Bloomberg Businessweek, “Defaults happen and when they do we are laser focused on recovery.”