Excerpt from a June 4 letter from Ragghianti Freitas partner Eric Sternberger to investors in Professional Financial Investors Inc., a Novato, California-based real estate firm that touts more than 900 apartment units under management and over 600,000 square feet of commercial warehouse space in Marin and Southern Sonoma counties.SEC Investigating Marin County Real Estate Company After Owner's Death
Investors in Professional Financial Investors Inc. were sent letters last week indicating that the SEC had opened a fact-finding inquiry into Kenneth J. Casey, who died last month, and his companies' three decades of real estate investments in Marin County and the southern part of Sonoma County.
June 08, 2020 at 06:57 PM
4 minute read
The U.S. Securities and Exchange Commission is investigating companies associated with Bay Area real estate investor Kenneth J. Casey, who died last month.
Lawyers at Ragghianti Freitas last week sent letters to investors in Casey's Professional Financial Investors Inc., a Novato, California-based real estate firm that touts more than 900 apartment units under management and over 600,000 square feet of commercial warehouse space in Marin and Southern Sonoma counties, and an associated fund, Professional Investors Security Fund Inc.
The investor letters indicated that the SEC has opened "a fact-finding inquiry" into Casey and "his companies' three decades of real estate investments" May 28. The law firm, which was hired to advise on the transfer of ownership of the two companies, referred the matter to the SEC after reviewing records related to the companies' real estate holdings and debt financings.
"At the outset of the review it became apparent that there existed legitimate questions involving the structure and investment history of Mr. Casey's companies," wrote Ragghianti Freitas partner Eric Sternberger in the June 4 letter to investors. In a follow-up Sunday letter to investors, Sternberger indicated that all payments to the firms' noteholders have been suspended as have withdrawals of investments. He also indicated that the SEC investigation is expected to take about three months.
A spokesperson for the SEC declined to comment Monday.
In an email statement provided Monday, Sternberger said his firm was retained to represent the companies by the beneficiary of Casey's estate, his ex-wife Charlene Albanese.
"Based on information from our initial review of the companies, Ms. Albanese agreed that the proper course of action was to ask the Securities and Exchange Commission to take a closer look," he said. The firm, Sternberger said, also represents Albanese as the executor of Casey's estate and the trustee of his three trusts. "Ms. Albanese desires a full accounting for the investors and requesting the SEC's involvement was an important first step," he said.
A May 15 obituary for Casey in the Marin Independent Journal indicated that he was the largest commercial property owner in the county. The obituary said that he died unexpectedly, but did not list a cause of death.
News of the SEC investigation comes as the company had been representing publicly to investors that it was poised to weather the economic turbulence caused by COVID-19. An undated "important message to investors" on the company's website says the company's real estate investments "are doing exactly what they were meant to do."
"And that is remain steady during severe downturns. Our buildings are in great shape. We are working with our tenants to monitor the situation and offer help," the message says.
Lewis Wallach, who is listed as the company's contact on its website and as its "president/CEO" on his personal LinkedIn page, didn't respond to a phone message Monday.
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