Washington State DFI Takes Action Against Equilus Group, Equilus Capital Partners, and their Real Estate Fund Offerings

Olympia - The Washington State Department of Financial Institutions (DFI) filed a Summary Order and Statement of Charges against investment adviser representative Joel Frank, investment adviser Equilus Group, Inc. (Equilus Group), fund sponsor Equilus Capital Partners, LLC (Equilus Capital Partners), and real estate funds Cheney Park Commons I, LLC, Cheney Park Commons II, LLC, OldTown Commons, LLC, 1421 Meadow Wood, DST, and ECP Opportunities Fund I, LP (together, the Equilus Funds). Joel Frank and the entities are Wenatchee, WA-based.

DFI also obtained a temporary restraining order and preliminary injunction in Thurston County Superior Court against these parties, their agents and employees, and Colt Creek Real Estate, LLC, a newly formed real estate fund. The court further agreed to DFI's request to appoint a receiver, High Plateau Asset Management, LLC, over the entities.

The receiver has the authority to, among other things:

• Take control of investor funds,
• Designate a successor investment adviser to oversee the funds,
• Engage in an accounting, and
• Determine the amount of misappropriated investor funds and any actions for recovery.

"DFI is taking these extraordinary measures in light of the significant investor harm we believe has been perpetrated by these individuals and organizations," DFI Acting Director of Securities Anderson said. "This type of alleged activity is precisely why state regulatory oversight and examinations are crucial."

DFI alleges that between at least April 2017 and October 2025, Joel Frank, Equilus Group, Equilus Capital Partners, and the Equilus Funds offered and sold more than $39 million worth of investments in the Equilus Funds to more than 90 investors, at least 70 of whom are Washington investors.

The Equilus Funds' investments were not registered in Washington State. DFI alleges that the parties relied on private placement exemptions available under federal law. These exemptions allow companies to raise money without oversight by state or federal regulators. The parties were therefore able to avoid detection of their unlawful acts for years.

The Division further alleges that Joel Frank, Equilus Group, and/or Equilus Capital Partners misappropriated money from the Equilus Funds, made Ponzi-like payments to investors, created false account statements, made material misrepresentations to investors, sold unregistered and non-exempt securities, operated as an unregistered broker-dealer, submitted false filings to the Securities Division, violated their fiduciary duties, and failed to adhere to custody requirements. In particular, the Division alleges that the parties distributed at least $779,777.43 to Joel Frank in unearned dividends for Frank's personal benefit.

The Summary Order and Statement of Charges suspends the registrations of Equilus Group and Joel Frank and orders Joel Frank, Equilus Group, Equilus Capital Partners, and the Equilus Funds to cease and desist from violations of the Securities Act.

DFI intends to order:

• That the registrations of Equilus Group and Joel Frank be permanently revoked;
• That future registrations by Equilus Group or Joel Frank be denied;
• That exemptions from registration be revoked;
• That the parties return all money misappropriated from the Equilus Funds;
• That the parties pay a fine; and
• That the parties pay investigative costs.

Letters have been sent to investors regarding the action and receiver. Investors with questions about their investments in the Equilus Funds may contact the receiver, High Plateau Asset Management, LLC, at [email protected].

Related Information:

• Case Summary
• SEC.gov | Private Placements - Rule 506(b)
• NASAA Statement on the SEC's Amendment of Accredited Investor Definition
• NASAA Accredited Investor-Comment Letter