Moneypoint,
a couple of points to answer your last post...
12-13% is a good return, however it's an annual return vs. Pinnacle's of 150% annualized. Too good to be true you say - you are right, however reliable and timely payouts by Pinnacle is what hooked me in and I suspect most other investors. I made my first investment of 5K in April knowing that I was taking a risk, but I also knew other investors that got paid, so I decided to give it a try. Ironically, I had no idea about Pinnacle's ads in newspapers until October, and invested the big chunk in September when a pinnacle’s advisor told me that they were moving to 6 month period payouts - I wanted to catch the last train, which I did :(.
I think that are different motivations that influenced peoples decisions to invest. I know at least two: 1. desperation 2. greed. I fell into the second category, but I know people that were so desperate to brake the vicious cycle and get some extra money for retirement that they borrowed the money and lost it in this fiasco.
I'm toubled that people write about what they've/we've "lost in this fiasco." We don't know the upshot yet.
Pinnacle has assets, and the Receiver is going to make his assessment within the month. Of course we won't get our so-called interest, but I remain hopeful that we will recover something of our principals -- through a distribution and perhaps through a class action lawsuit.
It ain't over til it's over, and I encourage everyone to consider fighting in whatever legal way we can. This is such a clear-cut case -- let's not become so pessimistic that we lose it before we even try.
Anonyc-
Right you are. Delayed and lost are not the same. I have to believe the swift action of the SEC might have saved the day. However, I would believe that the bulk of the funds you are going to receive are frozen at the bank. All of the other assets that have been purchased take extra time to liquidate and never come close to 100% after discounted auction sale and fees. It would be nice to know what the entire amount of inflow was to Pinnacle and how much is frozen in liquid form (ie, bank accounts). That way people could feel better about the situation and know where they stand. Mr. Hays, if you are reading this, it would be great if a preliminary figure could be mentioned. I am sure the anquish Pinnacle has caused is probably causing marital rifts and thoughts of a dark nature. Perhaps you can give the Pinnacle investors some hope.
As far as class action suit, it will certainly happen, but watch the amount of fees the lawyers and accountants eat from that pie. See Enron, Worldcom, and anything else you can think of for a precedent
Anonyc,
I agree with you, not all is lost, I am just trying to be realistic or pessimistic about the % of principal that will be returned to us so as not be shocked all over again.
The first way to get some money back on this deal is to claim it as an investment loss. Hays is supposed to have a memo for tax realted issues next month. For most, that's a return of 20 - 30% of lost principle State and Federal. The numbers that are posted on the receiver's site are $14.2MM in bank accounts, $12MM in properties. From the WSJ article, Pinnacle raised over $60MM from investors. By the time everyone else is paid, the rest will be lucky to see 25-30% of their principle returned. Once the class action lawsuit moves forward, we'll see some amount from that. All in all, it may be possible to see 50-70% of the principle returned from all sources. Of course that will take years. Hardly a complete loss though.
I hear you, rkny. We all have to strike a balance now between realism and the dangers of optimism and pessimism.
Moneypoint, thank you for your thoughtful words. We, the Pinned, are terribly anguished, and the sooner we know where we stand the better.
Personally I took this risk on my own and privately -- have no spouse or children to whom I'm accountable. Still, I wake up at night unable to sleep for hours. I know other investors are going through this and can only imagine the nightmare this could be for a family.
This is why I'm urging a "chin up and fight for it" attitude. We have to somehow direct our energies in a positive fashion, without losing a real perspective.
I definitely anticipate legal fees from a suit -- but it occurs to me that since we are 2000 deep, if each of us contributes only $250 that's already half a mil.
One more question: do we really think Pinnacle would have up and vanished if the SEC had not stepped in? Or would O'Neal alone have left town, stiffing his employees along with us? Very curious as to what other investors think. The people I spoke with at Pinnacle seemed decent, direct and guileless, and they all vouched for its legitimacy.
It is hard to guess what O'neal intended to do. I can tell you that I tried to get my principal back when I heard about the SEC inquiry and they would not give it back, even though I was willing to forego the interest. After having read the comments from some of the employees, I got the feeling that O’neal controlled outlay of every dollar paid. Calls that we were getting from accounting were after he gave his OK to pay. My gut feel tells me that he was getting ready to split as he was probably 20 mil short based on the upcoming due dates and was just stalling for time.
It's just all so weird! I spoke with my account rep, who said very soberly that we'd all get our principals and last rounds of interest back because Pinnacle Development Partners was phasing out, and the company was going to be a real estate consultancy.
Remember how we got all these glitzy packages from them describing Pinnacle Consulting Partners? They were opening offices in Detroit, Chicago and Cleveland.
What was that about?
Then there was the letter that said "Pinnacle has always honored its agreements with its partners." One of the receptionists told me, when I called on 9/21, that "the investors are Gean's main concern."
Aside from everything else, this is just a surreal Kafkaesque drama! I don't even think the tip of the iceberg hs surfaced on this story yet.
Regarding a class action lawsuit: Typically, the attorneys are paid out of the award and not out of client's pockets. If they take the case, you'd better believe they think they'll win it. They make out like bandits because they get a large percentage of the award. If they lose, they get nada. The main question is going to be how many people at Pinnacle were in on the scheme...
just a few notes to respond to some recent posts..
1. gene oneals personal assets are already frozen as part of the pinnacle case.
2. the receiver will be determining who, if any, other pinnacle executives and/or employees were "in on it". If anyone else is, the receiver will be going after them too, eliminating our need for class action.
3. pinnacles attorney kunkel.. who ever said he was a nice guy, were not to figure if hes a nice guy or not. all we want to know is if he knew what was going on. REMEMBER, all those letters from him stating he is pinnacles attorney & that he understand & supports pinnacles business model. the receiver will be questioning him & if he feels he had knowlegde, he will go after him too.
I agree with you Taxum. The fact that people were "NICE" has nothing to do with their ethics. "Money talks....B.S. walks" is usually the case. At Pinn. it was "Money talks....B.S. talks even louder!" The employees were supposed to sound "NICE and "TRUSTWORTHY". That's part of the reason we all got suckered in, along with desperation, greed, and wishfull thinking.
This is the first time I am posting my comments.
Moneypoint brings up very good points. When I read these postings, I can't help but think some of you investors are NUTS (no offense intended). I too am an investor, and when I invested I was quite skeptical. So why, do you ask that I invested, especially since I was skeptical. The Main Answer - which is very different from some of you, is that I can afford to lose the amount that I invested. I took a shot, and kissed my principal goodbye the same day I sent it, and I actually am not down because I just passed the 6 month point of recovery. The reason I took the shot was because I had 8 or so freinds that all invested and all were paid on time all the time, and that is what finally convinced me to take a shot. But some of my friends were not so lucky even though they began investing before me, and that is because they either rolled over their proceeds or they actually invested more recently. That is called GREED.
That is why everyone invested here, and yes moneypoint, all I kept thinking was that there is no way anyone can pay these high returns forever. It is not possible, and that is what I am so suprised at these investors. To take mortgages or life savings and invest in such a thing, with such promised returns, -- c'mon -- will never work. Moneypoint - you are doing the right thing, and don't think otherwise. I have many outside real estate investments, and the return is similar to yours, but they all legit. A great return is 20 - 25 % annualized. 12 to 16% is norm for real estate. That's it, anything more than that - you should be skeptical. Those that think otherwise - you are searching for something that either does not exist - or you will get scammed again.
moneypoint I see you are also in N.Y. so you are in the most competitive market there is. You sound like you know what you are doing, so don't change what you are doing - the grass is always greener on the other side - is a true expression.
Bottom line is Greed and that is what motivates. sorry to say, If you invested in this more than you can afford to lose, then it is your own faults. and those that kept rolling over - also you are the only one to blame.
hope I didn't upset anyone - but I tell it like it is.
Receiver,
If you’re reading, just a question, since we have about 14.2MM in the bank being held can that money be set up on an interest earning account? This should offset some of the cost we might incur, if any.
wishful thinking!
Sammy,
For any tht haven't read it, the Fraud Discovery Institute's report on Pinnacle is very thorough and has some good information: http://www.frauddiscovery.net/FDI_Pinnacle-Master.pdf
Yes, I used the last of my home equity and cashed out profit sharing from my husband's last job to invest. I did it to survive. Right now, being 38 weeks pregnant and with an unemployed husband, it's hard to sleep at night. I understand who is at fault. I don't see why other needs to point finger. So please, stop!!!
we are compiling a list of investors on a spread sheet for future possible civil class action after the SEC is finished. REMY started and I'm continuing.
If you haven't done so already please email (Name, email address, tel # )to:
Yo Robster, if you were truly "skeptical" you would not have invested ANYTHING. Like the rest of us, you saw this deal working out for other investors and did the natural thing: clambered on while the going was good.
I agree with FaithSD -- no need to judge, to call us "NUTS" or point fingers. For a while this was a hot opportunity and there was no evidence to the contrary.
Also, I don't believe investors were necessarily "greedy." Salaries suck these days. Mine doesn't seem to rise with inflation. Then there's debt, medical coverage, etc. This return was helping people resolve problems. It's not "GREEDY" to want to live a normal, middle class life, to look out for your kids -- or your parents.
It's greedy to bloodsuck other people's life savings, or even their investments, allegedly like Robster's, that can be "kissed goodbye." THAT'S greedy!
I echo those sentiments. There's no reason what so ever to play the name calling game. Guys remember we are all in this together. Whether we can afford to loose whatever is IRRELEVENT. The facts are; 1) we invested with hopes of making money, 2) we had ever reason this was a legitimate business model and 3) no matter what we do or say, we can't do anything until the receiver is allowed to do his job to the fullest extent.
Question Mr. Receiver, is it possible that we will receive our full principle back at some point? Are you going after everyone involved or is this probe centered around Pinnacle as an entity and Mr. Oneal ONLY?
I don't advertise because I don't need to. In fact, I turn away more investors than I accept. Advertising isn't an automatic clue that someone's a fraud, but it is certainly worth asking-- if these guys are so hot why do they have to run giant ads. Case in point- mutual fund and investment companies. The lowest returns in the western world seem to come with the highest fees, and the biggest advertising budget. I can find some nice feature stories on Enron- and we all know what happened there.
Point being, INVESTORS are not looking for returns from ads in Newsweek and the Wall Street Journal. Investors are looking at the financials-- did you ever see any? They're looking at the managements record-- namely WHO are these people? What's their track record? Who will personally vouch for their character and veracity? Is there an external audit of the business? Why or why not?
ANYONE can run an ad. The CON in con-artist is short for "confidence". That's the whole game. The con artist shows you everything but the duck's guts. They put a big veneer on everything and they attempt to gain your confidence so that they can part you from your money-- usually by playing on your greed. If they can blind you with promises of too-good-to-be-true rates of return, or the promise of a "jackpot" down the road. The really good ones will get a huge chunk of change from "investors" and then brazenly go back to the same investors with threats that if we can't raise $X amount more we're going to lose the whole thing-- instilling a fear or panic of losing the money they've already unwittingly lost anyway in hopes of motivating them to cough up even more.
As hard as it might be to swallow, it's absolutely true that the "investors" here did this to themselves. They didn't have first hand personal knowledge of who they were dealing with, they didn't investigate the management team, and they never saw ACTUAL financial documents or assets. They put their trust in the "presentation" and found out what happens when you do that.
You're missing the point.
The point is: returns that exceed 25% are unrealistic. Right there is a warning sign. and yes I was skeptical. To invest any money, you have to be prepared and accepting to lose it. That is the point. When I made my investment, I invested an amount that I was willing and able to lose. That does not mean I want to lose it, but you must consider worst case scenario. For anyone to invest life savings or take loans - you are not thinking straight. I am not name-calling, I am simply saying, when you make an investment you must invest an amount you are willing to lose or can live without. Otherwise - you shouldn't be investing.
Returns that are much better than normal are risky. My response regarding greed was directed to moneypoint's comments. Greed, meaning those high returns is what attracted the investors.
I'm not a "competitor" by any stretch of anyone's imagination. The other reason I don't advertise is that it would be illegal for me to advertise the way I do it without registering with the SEC, which I have not done.
You missed the main point of my post-- just because they've got an ad running in a credible publication does not make them (or anyone else) credible.
Robster, Buddy, you're missing my point as well.
You write: "Greed, meaning those high returns, is what attracted the investors."
I was saying: it's not greed, but the desire to simply live well -- to meet expenses without stress and worry.
Take a moment to read the posts of fellow investors. A lot of them, including myself, needed some financial supplement. What is greedy about that? The high returns were practical.
And 25% is not so outrageously high. Look at people who trade forex, options, and futures. They often earn such returns in less than 60 days. If Pinnacle had been honestly flipping properties, it is not unrealistic in the Atlanta housing market of 2004-5 that they could have offered such rates.
We were duped because information was withheld. This has nothing to do with greed -- only with our good faith violated.
You sure are hostile for someone I've never met. Obviously there are some complaints about the company and you posted that you were amazed because they ran a big ad in Newsweek, WSJ, etc. that they could be disreptuable.
The point you seem most worked up about is my remark that I turn away investors. It's a minor point. In fact, I've not made a single point for or against the company-- rather I've weighed in on investment principles-- not companies, or products.
Whether they are or good, bad, or indifferent is not something I've commented on. I've only pointed out that just because a company can run an ad doesn't make them credible.
Secondarily, I put the responsibility squarely on the shoulders of the investor. It was an admonishment-- do your own due dilligence.
While we're on investment principles, I'll bring up another one-- lose the emotion. Don't get married to your investments. If the numbers make sense you don't have to get all hot and bothered defending them. Just sit back and enjoy the returns. Ignore the critics, and naysayers and relax.
In your own post, you could not have posted a better example of a "greater fool" investment mentality. You even stated you thought that the returns wouldn't last due to housing market shifts. So, your gut told you you were riding the tail and big surprise you got whiplash.
You can always tell someone who's holding and hoping for a "greater fool" by their response to the slightest criticism, or interpretation of anything and everything that isn't enthusiastically supportive as "criticism" when it isn't. Just reaffirming what you've already known all along-- what you suspected, and even what you've stated outright. So, why take it personally? I'm just clarifying what you've already posted with a few comments of my own.