Claim Alleges Crown Capital Securities and Financial Advisor John Stephen Weiss Failed to Conduct Adequate Due Diligence on Illiquid DST Investments
DANA POINT, CA, UNITED STATES, November 5, 2026 /EINPresswire.com/ — National investment loss and securities law firm KlaymanToskes announces the filing of a Financial Industry Regulatory Authority (“FINRA”) arbitration claim (Case No. 26-02575) against LPL Financial LLC (“LPL”), as successor-in-interest to Crown Capital Securities, L.P. (“Crown Capital”), seeking at least $1.4 million in damages on behalf of a retired investor who suffered substantial losses involving Delaware Statutory Trust (“DST”) investments recommended by financial advisor John Stephen Weiss (CRD# 1097536).
Investors who suffered losses in Versity Investments or Passco DST offerings recommended by John Stephen Weiss through Crown Capital or other brokerage firms are encouraged to contact KlaymanToskes at 888-997-9956 or investigations@klaymantoskes.com for a free and confidential consultation to discuss their potential recovery options.
According to the Statement of Claim, the investor sought tax deferral, dependable income, and preservation of principal without assuming significant investment risk. Between 2019 and 2022, Weiss allegedly recommended three complex and illiquid DST investments that were unsuitable for the investor’s conservative objectives and retirement needs:
• Passco Palm Desert DST: $50,000 invested, with the entire principal reportedly lost.
• Versity Apex South Creek DST: $655,559 invested.
• Versity One on 4th DST: $755,724 invested.
The claim alleges that Crown Capital failed to conduct adequate due diligence into the DST sponsors and their management before recommending the investments. In particular, the claim identifies publicly available litigation involving Versity’s principals that raised allegations of misappropriation of investor funds, which predated the investor’s purchase of the Versity DSTs.
Subsequent litigation brought by Versity’s lenders alleges that more than $56 million in investor proceeds were diverted from four DST offerings, including Versity One on 4th, rather than used to repay financing as represented in the offering documents. The claim further alleges that Versity Apex South Creek experienced severe financial distress, including suspended investor distributions.
The Statement of Claim also alleges that Crown Capital and Weiss misrepresented the investments as thoroughly vetted, income-producing opportunities while failing to adequately disclose their illiquidity, concentration, financing risks, and potential for substantial losses.
“Brokerage firms are required to conduct reasonable due diligence before recommending private placements, including investigating the sponsor, its management, and potential red flags,” said Lawrence L. Klayman, Esq., Managing Partner of KlaymanToskes. “These obligations are especially important when investors are seeking to preserve their principal and generate retirement income.”
The claim seeks compensatory damages of at least $1.4 million, plus additional relief, and alleges unsuitable investment recommendations, inadequate due diligence, misrepresentations and omissions, negligence, breach of fiduciary duty, violations of Regulation Best Interest, and failure to supervise.
Investors who suffered losses involving Versity Apex South Creek DST, Versity One on 4th DST, Passco Palm Desert DST, or other DST investments recommended by Crown Capital, LPL Financial, or John Stephen Weiss are encouraged to contact KlaymanToskes at 888-997-9956 or investigations@klaymantoskes.com for a free and confidential consultation to discuss their potential recovery options.
About KlaymanToskes
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $650 million in Securities Litigation and FINRA Arbitration matters. KlaymanToskes has office locations in California, Florida, Nebraska, New York, and Puerto Rico.
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Contact
Lawrence L. Klayman, Esq.
KlaymanToskes, PLLC
+1 888-997-9956
investigations@klaymantoskes.com
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