Bruce Phillips of Cape Securities: Investor Alleges $100K in Damages Over Nelson Partners Skyloft Recommendation 

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Updated on: March 10, 2023

Nelson Partners Skyloft (NP Skyloft DST) Investment Losses? KlaymanToskes Has Recovery Options

National investment fraud lawyers KlaymanToskes is investigating Samuel Bruce Phillips Jr. (CRD# 2239471) of Cape Securities, Inc. following an investor complaint alleging $100,000 in damages due to unsuitable investment recommendations in NP Skyloft DST. It has recently been alleged that NP Skyloft failed to uphold the terms of its $35 million loan and that its loan equity provider, Axonic Capital, sold NP Skyloft’s student-housing investment property.

Investors that suffered losses in Nelson Partners Skyloft (NP Skyloft DST) with Samuel Bruce Phillips or any other financial advisor should immediately contact attorney Lawrence L. Klayman at 888-997-9956 or lklayman@klaymantoskes.com to discuss their recovery options.

Investor Files $100k Complaint Against Samuel Bruce Phillips Jr. 

According to FINRA BrokerCheck, Samuel Bruce Phillips Jr. has one pending customer complaint, filed on January 31st, 2023. The investor alleges that they exchanged investment real estate for shares in the 1031 DST Exchange issue known as NP Skyloft DST. 

The investor alleges damages of $100,000 due to unsuitable NP Skyloft DST investment recommendations by broker/financial advisor Samuel Bruce Phillips Jr. The customer further alleges that NP Skyloft DST was an unsuitable investment due to Phillips and his firm’s failure to conduct reasonable due diligence, leading to false statements and misrepresentation of the product. 

Investors who suffered losses as a result of NP Skyloft DST investment recommendations by Samuel Bruce Phillips Jr. at Cape Securities in Mcdonough, GA are encouraged to contact attorney Lawrence L. Klayman at (888) 997-9956 or lklayman@klaymantoskes.com for a free and confidential consultation to discuss recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you. 

What is Nelson Partners Skyloft? An Illiquid Real Estate Investment

Nelson Partners Skyloft (NP Skyloft DST) is an illiquid real estate private placement investment. Private placements or “Reg D” (non-public) securities offerings are high-risk investments for investors, as they are not bound to the same Securities Exchange Commision (“SEC”) disclosure requirements as public investment offerings. 

However, FINRA-regulated brokers and financial advisors who sold Nelson Partners Skyloft (NP Skyloft DST) may be liable for any losses incurred by investors. 

Delaware Statutory Trusts (“DSTs”), are an alternative for 1031 exchange investors seeking replacement properties. Investors may consider this type of commercial real estate investment for the monthly returns and diversification offered, without any landlord duties. However, DSTs are highly illiquid, and are likely only suitable for investors who can afford to have their funds tied up for long holding periods.

Nelson Partners Skyloft Fails to Uphold $35 Million Loan

According to its Form D SEC filing, Nelson Partners raised over $75 million from investors in order to fund its luxury student housing complex located near the University of Texas in Austin, TX. In its marketing materials, Nelson Partners purportedly claimed that dorms were pre-leased and that the demand for student housing was high. The investors included many retirees seeking reliable returns. 

Nelson Partners took out a $35 million loan from the Preferred Equity provider Axonic Capital, which it agreed to pay back with the investor funds raised. When the real estate market declined amidst the Covid-19 pandemic, NP Skyloft suspended monthly payments to investors and defaulted on its $35 million loan. Axonic Capital then took over and sold the student housing complex. Some investors have further alleged that Nelson Partner’s memorandum did not state that Axonic Capital had the power to take ownership of the property. 

Why May My Brokerage Firm Be Responsible For My Losses?

Brokerage firms and their advisors are required to do due diligence on financial products before offering them to investors. KlaymanToskes believes that brokerage firms that sold NP Skyloft were negligent in failing to investigate the preferred equity loan disclosed in the offering documents. Such failures leave brokerage firms liable in FINRA arbitration claims.

How Can I Recover My Losses?

FINRA (Financial Industry Regulatory Authority) is the self-regulatory body responsible for regulating all registered brokers and brokerage firms doing business with investors in the United States and other countries. In accordance with FINRA Rule 2111 brokers and brokerage firms have a duty to recommend suitable financial products and trading strategies based on their client’s financial interests and needs. 

The brokers and financial advisers who sold Nelson Partners Skyloft (NP Skyloft DST) may be liable for any losses incurred by investors if their due diligence was inadequate and they failed to question the company’s risk, financing needs, and/or the safeguards ensuring its $35 million loan would be paid off. 

KlaymanToskes believes a Financial Industry Regulatory Authority (“FINRA”) securities arbitration claim may be the best solution to recover investment losses. FINRA arbitration is a more cost-effective process for investors, often occurring with increased speed and efficiency over litigation. 

Investors who have experienced significant investment losses in NP Skyloft DST are encouraged to contact attorney Lawrence L. Klayman, Esq. for a free consultation at 1-888-997-9956 or lklayman@klaymantoskes.com. Every case is taken on a contingency fee basis, meaning we do not collect attorney’s fees unless we are able to obtain a financial recovery for you. 

About KlaymanToskes

KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.


KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.