Quick Summary (Investor Snapshot)

• Estimated Distribution: In the latest joint status report from the GWG Wind Down Trust and GWG Litigation Trust, the Litigation Trustee estimates that pending settlements, together with settlements already approved by the Bankruptcy Court, could collectively result in a distribution of approximately 3.78% to former GWG bondholders on account of their prepetition bond holdings.
• What This Means in Dollars: For every $100,000 invested, bondholders are estimated to receive just $3,780.

For most investors, this latest filing does not change the bigger picture: the GWG bankruptcy process is still unlikely to deliver meaningful compensation, and many investors should continue evaluating potential claims against the brokerage firms and financial advisors that sold GWG L Bonds.

What Should GWG L Bond Investors Do Now?

For many investors, the central legal question is no longer just what the bankruptcy case will pay.

It is whether the brokerage firm or financial advisor that sold the GWG L Bonds can be held accountable.

At Iorio Law PLLC, we have recovered millions for GWG L Bond clients on a contingency-fee basis (no recovery, no fee) by pursuing FINRA arbitration claims against the brokerage firms that recommended and sold these high-risk, illiquid securities.

GWG L Bonds were sold nationwide through brokerage firms that earned high commissions for recommending these illiquid, high-risk products. As our prior reporting and investigation page explain, firms involved in GWG L Bond sales had duties to:

• perform reasonable due diligence
• recommend only suitable investments
• disclose material risks and conflicts
• comply with best-interest obligations

Many investors were retirees or conservative investors seeking income. If they were sold GWG L Bonds as safe, appropriate, or income-producing without adequate risk disclosure, they may have viable claims through FINRA arbitration.

We outline these issues in detail in our GWG L Bond Investor Recovery Center.

Those claims are separate from the bankruptcy case.

That distinction is important.

A bankruptcy distribution does not prevent an investor from pursuing a claim against the broker-dealer or advisor that sold the investment.

Why Investors Should Not Wait

The newest status report may lead some investors to think they should simply wait for a bankruptcy check and move on.

That could be a mistake.

A projected 3.78% distribution is still a very small recovery. And waiting on the bankruptcy process does not necessarily stop the clock on potential legal claims against brokerage firms.

If you purchased GWG L Bonds through a financial advisor or broker-dealer, now is the time to review:

• when the bonds were purchased
• what representations were made
• whether GWG’s business model change was sufficiently and accurately disclosed
• whether liquidity, concentration, and issuer risk were fully explained
• whether the recommendation was suitable for your age, objectives, and risk tolerance
• which firm and registered representative were involved

Contact Iorio Law PLLC

Iorio Law PLLC is at the forefront of the GWG L Bond investigation. We are a New York-based securities arbitration and investor-advocacy law firm representing clients nationwide in cases involving stockbroker misconduct, unsuitable investment recommendations, and violations of FINRA and SEC rules.

The firm’s founder and managing attorney, August M. Iorio, has already recovered approximately $4 million for GWG L Bond investors through FINRA arbitration claims and continues to represent clients nationwide in claims against brokerage firms that sold the product.

If you purchased GWG L Bonds through Western International Securities, Centaurus Financial, Emerson Equity, Aegis Capital Corp., Arete Wealth Management, Ausdal Financial Partners, or Kingswood Capital— or any other broker-dealer — contact us for a free, confidential case evaluation.

Our firm is dedicated to holding brokerage firms accountable and helping investors recover their losses.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

Frequently Asked Questions

What is the latest estimated recovery for GWG L Bond investors?

According to the latest joint status report, the Litigation Trustee estimates that pending settlements together with already approved settlements could result in a distribution of approximately 3.78% to former GWG bondholders, or about $3,780 per $100,000 invested.

Is 3.78% the final GWG bankruptcy payout?

Not necessarily. The report describes this as an estimate based on current assumptions and pending matters. Actual distributions may be higher or lower.

When will GWG L Bond investors receive distributions?

The timing remains uncertain. The report indicates that additional settlement approvals and other unresolved issues still affect the distribution process.

Can GWG investors still pursue claims outside the bankruptcy?

Yes. In many cases, investors may still be able to pursue claims against the brokerage firms or financial advisors that sold GWG L Bonds through FINRA arbitration.

Why are so many GWG investors looking at FINRA arbitration?

Because bankruptcy recovery appears very limited, many investors are evaluating whether their brokers failed to perform due diligence, failed to disclose material risks, or made unsuitable recommendations.

If you are searching for information on “Versity Income Property Notes,” “VIP Notes,” “Versity Invest, LLC,” “Versity II,” or “Crew Enterprises” because your monthly interest payments unexpectedly stopped in April 2025, you are not alone.

Iorio Law PLLC dozens of represents investors nationwide in FINRA arbitration claims against broker-dealers that sold high-risk private placements and alternative investments. We are actively investigating the sale of VIP Notes through multiple broker-dealers, including:

• WealthForge Securities, LLC (Managing Broker-Dealer / Dealer-Manager)
• Great Point Capital, LLC
• Capulent LLC
• A.G.P. / Alliance Global Partners

If your VIP Notes were recommended and sold through any of these firms, or another FINRA member, this guide explains what VIP Notes are, the red flags surrounding the issuer, and why your broker-dealer may be legally responsible for your investment losses.

What are VIP Notes?

VIP Notes are a Regulation D (Rule 506(b)) private placement consisting of 24-month unsecured notes. The offering documents described the VIP Notes as an “income” investment designed to pay monthly interest. However, the central risk of this investment is extreme issuer credit risk.

When payments stop, investors usually learn the hard truth about private placement debt: a “note” of this type behaves less like a traditional secure bond and more like a highly speculative, unsecured loan to a private business.

The Key Legal Issue: Broker-Dealer Liability

Many investors mistakenly assume that if an issuer defaults, the invested capital is simply gone. In a FINRA arbitration claim, the legal focus shifts to whether the broker-dealer and the individual broker complied with their strict regulatory duties at the time of the recommendation and sale.

Broker-dealers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) and state and federal securities laws. To satisfy these obligations, firms must conduct:

• Reasonable Investigation: Broker-dealers must perform independent due diligence on the security and the issuer, which is especially critical for Regulation D private placements.
• Accurately Disclose Material Information: Broker-dealers and brokers must accurately disclose all material information about the security and  the issuer.
• Care Obligation: Brokers must exercise reasonable diligence, care, and skill to ensure the recommendation is in the retail customer’s best interest.
• Fair and Balanced Disclosure: Firms must disclose all material risks, red flags, and conflicts of interest.
• Supervision: Brokerages must implement and maintain supervisory systems designed to prevent unsuitable or misleading sales practices.

FINRA has long warned that complex, illiquid, “non-conventional” products require heightened diligence, supervision, and training. Regulatory Notice 23-08 reiterates that when recommending privately offered securities, firms should reasonably investigate the issuer and management, business prospects, assets, claims being made, and the use of proceeds.

Missed Red Flags: Why Diligence Mattered for VIP Notes

Because VIP Notes are unsecured issuer debt, a broker-dealer’s due diligence cannot stop at marketing language or a glossy pitch deck. According to recent arbitration filings, multiple lawsuits and arbitrations publicly alleged that Versity’s principals diverted and misappropriated syndicated investor funds for personal benefit well before many VIP Notes were sold.

A reasonably diligent broker-dealer evaluating this offering should have investigated:

• Whether the principals of the issuer were previously alleged to have defrauded investors.
• Whether the issuer had the actual financial capacity and liquidity to pay monthly interest and return principal at maturity.
• Whether the stated “repayment sources” (such as syndication and disposition revenue) were reliable.
• Whether offering proceeds were adequately controlled and safeguarded from diversion.
• Whether the serious public allegations of fraud and fund misappropriation against the issuer’s principals disqualified the product from being recommended to retail investors.

If your broker recommended these Notes as “safe” income while minimizing material risks—or failing to disclose the severe litigation history of the issuer’s principals which included allegations of defrauding investors—that failure can support claims for Reg BI violations, negligent misrepresentation, unsuitability, and failure to supervise.

The Role of the Broker-Dealer in VIP Notes Sales

Investors searching for recovery options often look up the specific broker-dealer that sold them the investment. Every firm involved had a duty to ensure recommendations were made only after meaningful diligence.

WealthForge Securities, LLC (Dealer-Manager)

When a firm serves as a dealer-manager (or “managing broker-dealer”) for a private placement, its gatekeeping role is central. WealthForge received significant compensation for this offering, including a 6% selling commission, a 0.65% dealer management fee, and a 1% broker-dealer allowance specifically tied to its due diligence review. This role typically involves product approval, structuring, and setting the supervisory systems governing how the product can be sold.

Selling Broker-Dealers (Great Point Capital, Capulent, A.G.P.)

Even if a firm was not the dealer-manager, it must satisfy the exact same core obligations when recommending and selling a private placement to a retail customer. They must independently understand the product, conduct a reasonable investigation, evaluate suitability, disclose conflicts, and supervise their representatives’ communications.

Common FINRA Arbitration Claims for VIP Notes Investors

While every case is fact-specific, VIP Notes disputes commonly include the following claims:

• Reg BI (Care Obligation) Violations: The recommendation was not in the investor’s best interest, and the firm performed inadequate diligence on the issuer’s debt risk.
• Unsuitability and Concentration: An illiquid, high-risk private placement was inappropriately sold to conservative or retirement-focused investors seeking capital preservation.
• Misrepresentation and Omission: The broker minimized default risk, liquidity limits, the unsecured status of the notes, and the severe litigation history of the issuer’s management.
• Failure to Supervise: The brokerage firm exhibited inadequate product approval, training, and oversight for private placement sales.

Red Flags Checklist: Signs Your Broker May Be Liable

You may have a strong case for FINRA arbitration if any of the following apply to your situation:

• You were told VIP Notes were “safe,” “stable,” “bond-like,” or a conservative income product.
• You were not clearly informed that the Notes were unsecured and highly illiquid.
• You were assured your principal would be returned at maturity without a serious discussion regarding default risk.
• VIP Notes made up a disproportionately large percentage of your investable assets or retirement funds.
• The broker downplayed or completely failed to disclose material lawsuits and concerns regarding the issuer’s management and financial condition.

Act Quickly to Protect Your Rights

FINRA generally applies a six-year eligibility rule measured from the occurrence or event giving rise to the claim, and broker-dealers may also assert various state statutes of limitation. With payments having stopped in April 2025, delaying action can weaken your evidentiary position and leverage.

If you own VIP Notes, immediately collect your account statements showing the purchase, your subscription agreement, the PPM, any pitch decks, and all written communications with your broker.

How Iorio Law PLLC Can Help VIP Notes Investors

Iorio Law PLLC represents investors nationwide in FINRA arbitration claims involving illiquid alternative investments, including Versity and Crew Enterprises-related offerings.

If your VIP Notes were sold through WealthForge Securities, Great Point Capital, Capulent, or A.G.P. / Alliance Global Partners, we can evaluate whether your broker-dealer complied with its due diligence, disclosure, and best-interest obligations—and pursue recovery through FINRA arbitration where appropriate.

For more information on our related investigations, please visit our Delaware Statutory Trusts (DSTs) Investigation Page.

Next Step: Contact us today. Send us your trade confirmation or account statement showing the VIP Notes purchase, along with any emails or pitch materials from your broker, for a comprehensive case evaluation.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

Current filings, arbitration claims, and sponsor disclosures point to serious financial irregularities, including misappropriation of funds, suspended distributions, and significant due diligence failures by the broker-dealers who sold these high-risk investments.

These developments are part of a growing series of Versity Investments lawsuits and Crew Enterprises lawsuit updates involving multiple DST offerings nationwide.

Investor Alert: If you invested in Hayworth Tanglewood DST or other Versity-sponsored offerings, your recovery window may be limited. Contact Iorio Law PLLC immediately for a case evaluation.

Property Profile: What is Hayworth Tanglewood DST?

Hayworth Tanglewood DST is a Delaware Statutory Trust formed to acquire a Class A, mid-rise multifamily residential property located in Houston, Texas. 

According to the offering documents:

• Property Type: Class A mid-rise multifamily community
• Property Address: 1414 Wood Hollow Drive, Houston, Texas 77057
• Units: 246 residential units
• Net Rentable Area: Approximately 351,000 square feet
• Site Size: Approximately 3.08 acres
• Occupancy at Acquisition: Approximately 94% leased
• Acquisition Date: June 30, 2022
• Purchase Price: $105.5 million
• Loan Amount: $48 million
• Offering Date: July 27, 2022
• Total Equity Raised: $76,767,365
• Total Offering Price: $124,767,365
• Loan-to-Offering Price Ratio: Approximately 38.47%
• Sponsor: Versity Invest, LLC

The offering was marketed aggressively to 1031 exchange investors.

Why Is Hayworth Tanglewood DST Under Investigation?

The investigation focuses on allegations that the sponsors—specifically principals Blake Wettengel and Tanya Muro—engaged in misconduct that jeopardized investor capital. Furthermore, the broker-dealers who recommended these products may have failed their regulatory duties to vet the sponsors before selling the DSTs to retirees and accredited investors.

Key Allegations and Red Flags:

• Suspended Distributions: Investors have reported halted monthly distributions, a primary indicator of cash flow distress and potential foreclosure risk.
• Misappropriation of Funds: Civil litigation alleges that syndicated investor proceeds were diverted, commingled with other property funds, or used for unauthorized bonuses and personal expenditures.
• Declining Valuation: Market reports in 2025 suggest the property value has fallen below the 2022 acquisition price.
• Prior Knowledge: Public lawsuits filed as early as 2020 alleged similar misconduct by the same principals, raising questions about why broker-dealers continued to sell these products in 2022 and/or fail to disclose the allegations.

The Role of Broker-Dealers: Liability for Due Diligence and Disclosure Failures

Investment firms are not merely order takers; they are gatekeepers. Under Regulation Best Interest (Reg BI) and FINRA Rule 2111, broker-dealers have a duty to conduct reasonable due diligence.

Further, under federal and state securities laws, they have a duty to disclose all material information and not to misrepresent any material information.

Selling Firms

Upon information and belief, the following FINRA-member firms sold Hayworth Tanglewood DST:

• AAG Capital, Inc.
• Aurora Securities, Inc.
• Cabin Securities
• Capulent, LLC
• Coastal Equities, LLC (now Realta Equities, Inc.)
• Emerson Equity, LLC
• Lion Street Financial
• MSC-BD, LLC
• WealthForge Securities, LLC
• Westpark Capital, Inc.

The PPM identifies WealthForge Securities, LLC as the exclusive managing broker-dealer, with authority to re-allow commissions to participating selling firms.

Broker-dealers received:

• 6.0% selling commissions
• 0.65% dealer management fees
• 1.0% broker-dealer allowance
• Additional wholesaling compensation

Total upfront selling compensation and offering expenses could exceed 9%.  The high sales commissions and fees can have a negative impact on the profitability of the property and the DST structure.

Potential Violations

Iorio Law is investigating whether these firms:

1. Ignored Red Flags: Failed to investigate the litigation history of Wettengel and Muro (Versity/Crew principals).
2. Disclosure Failures: Failed to disclose to investors that the principals of Versity/Crew, Wettengel and Muro, were previously alleged to have defrauded investors by diverting their funds away from the properties being purchase for syndication and used for undisclosed and improper purposes.
3. Overlooked Conflicts: Failed to analyze sponsor structure and conflicts of interest that involved the principals owning the management company and other affiliated entities, which allowed them to allegedly divert money away from the property.
4. Unsuitable Recommendations: Sold illiquid, high-risk DSTs to conservative investors, retirees, or those requiring stable income.

Sponsor Structure: Conflicts of Interest

The Hayworth Tanglewood offering documents (PPM) reveal a complex web of affiliate-controlled entities designed to extract fees regardless of property performance.

• Asset Management Fees: 1.0% of gross revenue to Versity.
• Property Management Fees: 2.5% of monthly gross revenue to Book and Ladder, LLC (affiliate).
• Bonus Rent: The “Master Tenant” (affiliate) participated in operating income.

These arrangements were not negotiated at arm’s length, creating a direct conflict between the sponsor’s desire for fees and the investors’ need for returns.

Allegations of Misappropriation by Versity, Crew Enterprises, Wettengel, and Muro

Arbitration filings and civil litigation allege that Blake Wettengel and Tanya Muro, principals of Versity Investments and later Crew Enterprises, engaged in:

• Diversion of syndicated investor proceeds
• Commingling of property funds
• Unauthorized transfers
• Payment of improper bonuses
• Use of DST capital for unrelated investments and personal expenditures

Importantly, these allegations pre-date the Hayworth offering. Public lawsuits filed in November 2020, and June 2021 alleged substantially similar misconduct involving the same principals and DST syndication structures.

Hayworth Tanglewood Performance Issues and Distribution Suspensions

According to investor claims and sponsor communications:

• Hayworth Tanglewood DST has experienced declining occupancy levels
• Distributions have been suspended for extended periods
• Sponsor communications regarding property performance have been limited
• Market valuations in 2025 reportedly reflected values below the 2022 acquisition price

Suspended distributions are often a warning sign of deteriorating cash flow and heightened foreclosure risk in leveraged DST structures.

What Hayworth Tanglewood Investors Should Do Now

If you invested in Hayworth Tanglewood DST or any Versity-sponsored DST, you may have claims for:

• Violation of Regulation Best Interest (Reg BI) (including failure to conduct reasonable due diligence)
• Material Misrepresentations and Omissions
• Breach of Fiduciary Duty
• Negligence and Failure to Supervise

These claims are typically pursued through FINRA arbitration, which allows investors to seek recovery directly from broker-dealers — even when sponsors face insolvency.

Iorio Law PLLC Represents DST Investors Nationwide

Iorio Law PLLC is a securities arbitration law firm representing investors nationwide. We specialize in recovering losses from unsuitable alternative investments and broker-dealer misconduct.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

No recovery, no fee. Contact us today to review your legal options.

Most recently, Kingswood Capital Partners, LLC has been hit with significant sanctions for its failure to monitor the sale of these high-risk products.

If you’ve suffered losses in GWG L Bonds, visit our firm’s GWG L Bond Recovery Center to learn more and explore your potential legal options.

FINRA Letter of Acceptance, Waiver, and Consent No. 2020068830202 (Kingswood Capital Partners, LLC)

On Friday, December 12, 2025, the Financial Industry Regulatory Authority (FINRA) finalized a Letter of Acceptance, Waiver, and Consent (AWC No. 2020068830202) regarding Kingswood Capital Partners, LLC related to the sale of GWG L Bonds. Without admitting or denying the findings, Kingswood consented to a censure and a $150,000 fine.

FINRA found that between March 2019 and June 2019, Kingswood Capital failed to reasonably supervise a former registered representative who recommended GWG L Bonds and other illiquid alternative investments to senior investors.

FINRA’s findings detailed alarming cases of unsuitable recommendations and overconcentration:

• The 81-Year-Old Investor: A Kingswood representative recommended an 81-year-old client invest $96,000 into GWG L Bonds, despite the client having an annual income of less than $50,000. This single investment resulted in an astounding 96% of the client’s liquid net worth being concentrated in a high-risk, illiquid product.
• The 66-Year-Old Investor: In a similar case, the representative recommended an $88,000 investment in GWG L Bonds to a 66-year-old client with a moderate risk tolerance. This placed over 35% of the client’s liquid net worth into a single speculative product.

FINRA determined that Kingswood Capital violated FINRA Rules 3110 (supervision) and 2010 (standards of commercial honor) by failing to maintain a supervisory system designed to prevent such extreme concentration in illiquid products.

FINRA determined that Kingswood Capital violated FINRA Rules 3110 (supervision) and 2010 (standards of commercial honor and principles of trade) for failure to establish and maintain a supervisory system or written procedures reasonably designed to detect and prevent such extreme concentration in illiquid products.

Read the full AWC here: FINRA AWC – Kingswood Capital

Recent Arbitration Claim Filed by Iorio Law

Iorio Law PLLC has recently filed a new FINRA arbitration statement of claim against Kingswood Capital on behalf of an investor who suffered significant losses from GWG L Bonds.

The claim includes allegations that Kingswood Capital, through its brokers, recommended that the Claimant borrow money via a securities-based loan against newly deposited funds to invest $125,000 into three speculative, high-risk, illiquid, and high-commission alternative investments and/or private placement offerings.

The claim alleges the firm’s actions constituted unsuitable and misleading investment recommendations, as the brokers leveraged client funds to purchase high-risk GWG L Bonds that were fundamentally incompatible with the investor’s financial goals. Furthermore, the claim details how Kingswood Capital misrepresented and omitted material facts by failing to disclose the speculative nature of these securities and the mounting financial instability of the issuer.

Central to the claim is Kingswood Capital’s failure to conduct reasonable due diligence regarding GWG L Bonds and GWG Holdings, Inc. Proper diligence would have revealed significant “red flags” long before the company’s collapse. These allegations drive our effort to hold the firm accountable for the client’s devastating financial losses.

GWG L Bonds & Recovery Options

For most investors, the bankruptcy court offers little hope. The GWG Wind Down Trust currently projects a nominal recovery of only around 2.7% to 3.45% of the original principal.

To put this in perspective: For every $1,000 invested, a bondholder may only see a return of about $26.94 to $34.46.

Furthermore, there is no confirmed date for when these fractional payments will begin, with current projections suggesting that investors will remain empty-handed until at least later in 2026. Given these “pennies on the dollar” projections, FINRA arbitration has become the most viable path for meaningful recovery.

Arbitration allows you to pursue claims against your brokerage firm—rather than the bankrupt issuer—for the sale of unsuitable investments. These claims are separate from the bankruptcy liquidation and focus specifically on broker misconduct.

Stay informed by checking our GWG L Bond Update Blog for the latest news on trust distributions and regulatory actions.

About Iorio Law PLLC

Iorio Law PLLC is at the forefront of the GWG L Bond investigation. We are a New York-based securities arbitration and investor-advocacy law firm representing clients nationwide in cases involving stockbroker misconduct, unsuitable investment recommendations, and violations of FINRA and SEC rules.

The firm’s founder and managing attorney, August M. Iorio, has already recovered approximately $4 million for GWG L Bond investors through FINRA arbitration claims and continues to represent clients nationwide in claims against brokerage firms that sold the product.

If you purchased GWG L Bonds through Kingswood Capital — or any other broker-dealer — contact us for a free, confidential case evaluation.

Our firm is dedicated to holding brokerage firms accountable and helping investors recover their losses.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
🖊️ Free Case Review: Contact Form

Recent developments—including loan defaults, suspended distributions, allegations of misappropriation of investor funds, and multiple Versity Investments lawsuits and Crew Enterprises lawsuits—raise significant concerns for investors and for the broker-dealers who recommended this offering.

If you invested in Apex South Creek DST, contact us for a free consultation.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
🖊️ Free Case Review: Contact Form

What Is Apex South Creek DST?

Apex South Creek DST is a Delaware Statutory Trust formed to acquire a newly built Class A multifamily apartment community located at 3060 Southcreek Blvd., Orlando, Florida.

The offering was created and managed by Versity Investments, LLC (formerly NB Private Capital) and affiliated entities now operating under Crew Enterprises, LLC.

Broker-dealers marketed Apex as a stable, income-producing 1031 investment. However, at the time of the offering, the principals of Versity Investments, LLC were already alleged to have diverted and misappropriated syndicated funds away from other DSTs. Further, recent developments demonstrate that the investment has become deeply distressed and may have been unsuitable for many investors.

Who Sold Apex South Creek DST?

Based on information obtained to date, and upon information and belief, Apex South Creek DST was sold to investors by:

• Brian Nelson of Emerson Equity, LLC
• Don Linzer of Coastal Equities, Inc. (now Realta Equities, Inc.) and Great Point Capital LLC

These firms and representatives are believed to have sold Apex South Creek to retail investors, including 1031-exchange clients who relied on their brokers’ recommendations and due diligence.

Broker-dealers earned substantial commissions—often 5% to 7%—for selling interests in Apex South Creek DST. Those commissions created strong incentives to push high-risk DST offerings regardless of suitability.

Emerson Equity served as the managing broker-dealer for many Versity-sponsored DSTs, meaning it played a central role in supervising the due-diligence process and coordinating sales through participating broker-dealers.

Coastal Equities (now Realta Equities) has been associated with multiple high-risk alternative investment sales, including other DSTs that later experienced distress.

Upon information and belief, Coastal Equities and Great Point Capital were some of the largest sellers of DSTs sponsored by Versity Investments.

Other Broker-Dealers That Sold Versity-Sponsored DSTs:

Multiple other broker-dealers have sold Versity Investments / Crew Enterprises-sponsored DST offerings, including:

• Purshe Kaplan Sterling Investments
• Lion Street Financial
• Stonecrest Capital Markets
• Westpark Capital, Inc.
• IBN Financial Services, Inc.
• Dempsey Lord Smith, LLC
• WealthForge Securities, LLC
• AAG Capital, Inc.
• Cape Securities, Inc.
• Aurora Securities, Inc.
• Capulent, LLC

These firms appear across various Versity-sponsored DSTs, such as The Walk, Vintage, Hayworth Tanglewood, One on 4^th, Nine, and others that are now experiencing distress, suspended distributions, or litigation.

The presence of such a wide network of selling broker-dealers underscores the industry-wide distribution of Versity-sponsored DSTs and the potential systemic due-diligence failures related to these offerings.

Distributions to Investors Have Been Suspended:

Multiple investors report that Apex South Creek DST distributions have been suspended, leaving investors without expected monthly income.

The suspension occurred despite the sponsor’s earlier “yield enhancement” marketing, which temporarily increased stated rent to investors using sponsor-funded payments—a red flag indicating that actual property cash flow was likely insufficient to support stated distributions.

Suspended distributions often correlate with impaired property operations and may significantly reduce investors’ ability to recover principal upon sale or refinance.

They are a major indicator of financial distress and are highly relevant to Reg BI and suitability analyses for broker-dealers that recommended the DST.

Apex South Creek Faces Severe Loan Defaults and Multimillion-Dollar Judgments:

Recent court filings show that Apex South Creek is in significant financial distress, including:

$47 Million Judgment Against Versity Invest

Lenders obtained a judgment of approximately $47 million against Versity Invest, LLC, the guarantor for the Apex South Creek financing.

Lender Lawsuit Against Project-Level Borrower

The lenders are also pursuing the project-level borrower, Apex South Creek IB, LLC, another Versity-controlled entity.

Key Allegations From Court Filings

According to sworn lender allegations:

• Original principal across the notes totaled $42 million.
• Maturity dates were extended three times (ultimately to May 18, 2024).
• No interest payments have been made since November 2023.
• Apex South Creek has allegedly been in default for months.
• Outstanding principal as of March 31, 2025 is $34,114,356.
• Total amounts due now exceed $42,953,401.

The lenders also allege that Versity misappropriated syndication proceeds, meaning investor-raised capital was allegedly diverted for improper uses—forcing the lenders to “involuntarily fund” part of the Apex South Creek transaction.

This allegation mirrors claims made in other Versity Investments lawsuits and Crew Enterprises lawsuits, strengthening concerns that the problems at Apex are not isolated.

Investors Sue Apex South Creek DST: Claims of Willful Misconduct and Fraud

Separately, Apex South Creek DST investors have filed litigation in the Delaware Court of Chancery:

Apex South Creek DST, et al., 2025-0990-SEM (Del. Ch.)

The investor petition seeks to remove the DST trustee, citing:

• Willful misconduct
• Fraud
• Gross negligence
• Breach of fiduciary duty

A DST trust-removal action is exceptionally rare and typically occurs only when investors believe the sponsor or trustee engaged in serious wrongdoing.

Serious Allegations Against Versity, Crew Enterprises, Blake Wettengel, and Tanya Muro:

Apex South Creek is not the only DST sponsored by Versity/Crew facing problems.

Multiple lawsuits—including the KHCA/Knights Hill, Nelson brothers, and other DST investor actions—allege that: Blake Wettengel and Tanya Muro through Versity Investments, Versity Invest, and Crew Enterprises diverted and misappropriated syndicated proceeds, “commingled funds,” paid themselves unapproved bonuses, and extracted excessive “partnership expenses.”

In several DSTs, these issues have allegedly contributed to:

• Suspended distributions
• Loan defaults
• Massive deficits in operating and reserve accounts
• Risk of foreclosure
• Investor capital impairment or loss

These allegations form the basis of several ongoing legal actions—making Apex South Creek part of a larger pattern of sponsor misconduct.

Why Broker-Dealers May Be Liable for Apex South Creek DST Losses:

Broker-dealers who recommended Apex South Creek DST may be liable for investor losses if they:

• Failed to conduct adequate due diligence on Versity Investments or Crew Enterprises
• Failed to detect and disclose material information about Versity, Crew, Wettengel, and Muro, including regarding past allegations of defrauding investors and misappropriating investors’ syndicated proceeds
• Ignored red flags about the sponsor’s financial condition
• Recommended an illiquid, high-risk DST to unsuitable investors
• Misrepresented stability, income expectations, or the true risks of the investment
• Violated Regulation Best Interest (Reg BI) or FINRA Rules 2111, 3110, and 2210

Due diligence failures are especially significant given the now-public allegations of:

• Diversion of investor funds
• Sponsor cash-flow manipulation
• Repeated problems across multiple Versity-sponsored DSTs
• Financial distress predating the suspension of distributions
• Severe governance failures and trustee misconduct claims

Given that allegations of misappropriation surfaced as early as 2020, a reasonable due-diligence inquiry would have identified material red flags requiring enhanced scrutiny

FINRA arbitration is often the most effective way for investors to recover losses against the broker-dealers involved.

What Apex South Creek Investors Should Do Now:

If you purchased Apex South Creek DST—or are researching the latest Versity Investments lawsuit update or Crew Enterprises lawsuit update—you may have strong legal claims.

You may be entitled to recover losses for:

• Unsuitable recommendations
• Misrepresentations and omissions
• Failure to conduct due diligence
• Reg BI violations
• Failure to supervise
• Breach of fiduciary duty

You do not need to sue the sponsor; your claims are typically against the broker-dealer in FINRA arbitration.

Iorio Law PLLC Represents Versity-Sponsored DST Investors Nationwide:

Iorio Law PLLC is a national securities arbitration firm representing investors in claims involving DSTs, private placements, alternative investments, and broker-dealer misconduct.

Our attorneys have recovered tens of millions of dollars for investors harmed by unsuitable investment recommendations involving high-risk, complex investment products.

If you invested in Apex South Creek DST or any other Versity-sponsored DST, contact us today to review your legal rights.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
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