Grant Cardone and the Ninth Circuit Court: A Deep Dive into Alleged Misleading Investment Practices
Ninth Circuit Revives Class Action Lawsuit Over Alleged Misstatements, Misleading Projections, and Debt Deception in Cardone Capital Real Estate Offerings
INSIDE THE RULING
In a significant legal development, the Ninth Circuit Court has reversed a district court’s dismissal in the case of Pino v. Cardone Capital, LLC. The court found that the plaintiff, Christine Pino, had sufficiently alleged misleading investment statements and material omissions by Grant Cardone, a prominent real estate mogul. This ruling comes in the wake of allegations that Cardone continued to promote a 15% return on investments via social media platforms like Instagram and YouTube, even after the SEC cautioned him that such projections lacked evidentiary support.
The Ninth Circuit criticized the district court for misapplying securities law and disregarding established precedents, including the landmark case Omnicare v. Laborers District Council.
BACKGROUND: A Promise Too Good to Be True?
In an era dominated by TikTok finance gurus and YouTube wealth strategists, Grant Cardone has carved out a niche for himself with his brash confidence and high-energy investment pitches. His bold claims have attracted a significant following, particularly among everyday investors seeking opportunities in real estate.
Cardone’s promise of a "15% annualized return" became a hallmark of his marketing strategy. “You can tell the SEC that’s what I said it would be… Some people call me Nostradamus, because I’m predicting the future dude—this is what’s gonna happen,” he proclaimed in a YouTube video, as noted in the court’s June 10, 2025 opinion. Such statements helped him raise substantial capital from unaccredited investors through Regulation A offerings via his firm, Cardone Capital, LLC.
However, the Ninth Circuit’s ruling serves as a stark reminder of the legal obligations that accompany such bold claims. The court found that Christine Pino, the daughter of the late unaccredited investor Luis Pino, has valid securities law claims under §§ 12(a)(2) and 15 of the Securities Act of 1933. These claims include allegations that Cardone:
Misrepresented Investment Returns: The court found that Cardone’s public statements about expected returns were potentially misleading, especially given the SEC’s warnings.
Omitted Material Information: The ruling highlighted that Cardone failed to disclose critical information that could affect an investor’s decision-making process.
Engaged in Deceptive Practices: The court’s opinion suggests that Cardone’s promotional tactics may have crossed legal boundaries, raising questions about the ethical implications of his marketing strategies.
The Implications of the Ruling
The Ninth Circuit’s decision to revive the class action lawsuit against Cardone Capital has far-reaching implications for both investors and the broader investment community. It underscores the importance of transparency and honesty in investment promotions, particularly in an age where social media plays a pivotal role in shaping public perception.
Investors, especially those who are unaccredited, must be vigilant and informed about the risks associated with high-return promises. The ruling serves as a cautionary tale for those who may be swayed by charismatic pitches without fully understanding the underlying risks.
Conclusion: A Call for Accountability
As the legal proceedings continue, the case against Grant Cardone and Cardone Capital will likely serve as a critical touchstone in discussions about securities law and ethical investment practices. The Ninth Circuit’s ruling emphasizes that even the most charismatic figures in the investment world are not above the law.
For investors, this case is a reminder to conduct thorough due diligence and to be wary of promises that seem too good to be true. As the landscape of investment continues to evolve, the principles of transparency and accountability remain paramount.