A San Francisco Bay Area real estate firm under investigation by the U.S. Securities and Exchange Commission reported that it had insufficient equity to return the total principal for some of its investors, after finding that six of its 30 properties have no equity, according to an investor update Wednesday.

The SEC launched a fact-finding inquiry into Novato-based Professional Financial Investors Inc. after company founder Kenneth J. Casey died in May. Last month, the firm had all of its corporate officers resign and tapped Michael Hogan of Armanino as PFI's chief restructuring officer. In a June 28 investor update, Hogan verified that the company had engaged in "serious misconduct" in the three decades years prior to Casey's death.

In Wednesday's letter, Hogan told investors what he had discovered so far through "unraveling more than 30 years of misconduct."

"Not all of this will be welcome news because while we have identified substantial equity that will be allocated to the investors, there will be insufficient equity to permit the return of all the principal to some of you," he wrote.

PFI is still calculating the equity value of PFI's assets, Hogan said, and the company is auditing each investment property. "Based on the broker price opinions, we anticipate at least six of the 30 properties owned by PFI have no equity," he said.

Casey was one of the largest commercial property owners in Marin County, according to Marin Independent Journal, with more than 900 apartment units under management and over 600,000 square feet of commercial warehouse space in Marin and southern Sonoma counties.

Ragghianti Freitas is advising the company on the transfer of ownership for PFI. Ragghianti Freitas partner Eric Sternberger referred that matter to the SEC following an audit of real estate holdings and debt financing.