Grant Cardone Class Action Lawsuit: 15% Return and Ninth Circuit Ruling

The Grant Cardone class action lawsuit, Pino v. Cardone Capital, LLC, accuses the real estate promoter of misleading investors in two crowdfunded real estate funds by advertising a 15% annual return on social media after the SEC told him those projections had no reasonable basis. Filed in federal court in the Central District of California in September 2020, the case was dismissed twice at the trial level and revived twice by the Ninth Circuit, most recently on June 10, 2025. It is now proceeding on remand, and investors who bought interests in Cardone Equity Fund V or Fund VI have until July 14, 2026, to opt out of the class.¹

Who Is Suing and What They Bought

The original plaintiff, Luis Pino, filed suit on September 16, 2020.² After his death, his daughter Christine Pino took over as named plaintiff and filed an amended complaint in February 2021 on behalf of a proposed class of everyone who purchased interests in Fund V or Fund VI through their public offerings.³ The defendants are Grant Cardone, Cardone Capital LLC, Cardone Equity Fund V, and Cardone Equity Fund VI.

Both funds were Regulation A offerings under the JOBS Act, which lets companies raise money from ordinary investors who fall below the SEC’s accredited-investor wealth thresholds. Fund V sought to raise up to $50 million, selling Class A interests at $1,000 each with a $10,000 minimum investment.⁴

The Core Allegation: A 15% Return Promise

The lawsuit centers on statements Cardone made on Instagram and YouTube to his millions of followers. According to the complaint, he told prospective investors they would “walk away with a 15% annualized return,” that a ten-year investor would “earn 150%,” that some people called him “Nostradamus” for his ability to predict returns, and that investors could “double their money.”³

The complaint alleges Cardone attached specific dollar figures to those projections: that a $100,000 investment would produce $500 per month in distributions, that a $200,000 investment would grow into a $660,000 position, and that property values would triple within five to seven years.⁵

Separately, Cardone posted on Instagram: “One question you might want to ask is, who is responsible for the debt? The answer is Grant [Cardone]!” The plaintiffs say this led investors to believe Cardone personally guaranteed the funds’ loans, which would reduce their risk and lift their potential returns.⁶

The complaint also alleges self-dealing that was never disclosed to investors: that Cardone charged the funds interest on loans he personally provided for property acquisitions, with debt service paid out of investor capital, and in some cases bought properties with his own money and then flipped them to the funds at a 6% financing rate.⁵⁷

The claims are brought under Sections 12(a)(2) and 15 of the Securities Act of 1933. They are not fraud claims. The plaintiffs explicitly disclaimed fraud and are proceeding on a negligence-based theory, meaning they do not need to prove Cardone intended to deceive anyone.

The SEC Comment Letter

The single most important document in the case is a July 2018 letter the SEC sent to Cardone Capital during the Regulation A qualification process for Fund V.⁷ SEC staff instructed the company to strike the projected 15% annualized return and related distribution figures from its offering circular because the projections lacked a reasonable foundation: the fund had just begun operations, had not yet purchased properties, and had never paid distributions.⁸

Cardone Capital complied. It removed the projections and wrote back to confirm the deletions. While the company pushed back on other SEC critiques in the same letter, it offered no objection on the return projections.⁹ According to the plaintiffs, Cardone then kept promoting the same 15% figure on social media without ever telling potential investors the SEC had objected to it.⁶

What the Funds Actually Returned

SEC filings show performance well below the 15% figure Cardone advertised. Fund V’s 2020 annual report shows it distributed $2,166,124 to investors that year, a 4.33% annual rate of return.¹⁰ By the first half of 2024, the fund reported it was maintaining a 5% cash distribution, with average occupancy around 95% across its five multifamily properties.¹¹

How the Case Has Moved Through the Courts

The case has been dismissed twice and revived twice:

September 2020. Luis Pino files the original complaint in the Central District of California, assigned to Judge John F. Walter.¹²
April 2021. The district court dismisses the case with prejudice.¹²
December 2022. The Ninth Circuit affirms in part but reverses on the threshold question of statutory-seller status, holding that Cardone and Cardone Capital can be held liable for statements used to promote the offerings.³
February 2023. A separate Ninth Circuit ruling reverses dismissal of the claims about the 15% projections and the debt-obligation statements.
June 2023. Plaintiffs file a second amended complaint.
October 2023. The district court again dismisses with prejudice and enters final judgment for the defendants.¹²
June 10, 2025. The Ninth Circuit reverses the second dismissal and remands.³

What the Ninth Circuit Held in June 2025

The three-judge panel rejected nearly every ground the district court had used to throw the case out.

On the 15% projections, the court held the plaintiffs adequately alleged Cardone did not actually believe his own claims. He had quietly removed the projections from the formal offering materials after the SEC objected, offered no pushback, and then kept promoting the same numbers on social media. The court found this “silent removal” supports an inference of “subjective disbelief.”⁸ The panel also found the projections were objectively baseless: no prior fund had performed at that level, the underlying properties had not been purchased, and there was no supporting data.¹³

On the omission claim, the court held Cardone’s failure to tell investors about the SEC comment letter was actionable even though the letter sat on the SEC’s public EDGAR database. Posting a document to a government database does not relieve a company of its duty to avoid misleading investors who are unlikely to find or read it.⁸

On the debt-obligation claim, the panel found Cardone’s Instagram post suggesting he personally bore the funds’ debt was potentially material, because whether Cardone or the funds carried the debt could meaningfully affect an investor’s assessment of costs and returns.¹³

The court also rejected the defense argument that disclaiming fraud barred the misstatement claims. Section 12(a)(2) does not require fraudulent intent, and disclaiming fraud does not waive the right to pursue a negligence-based claim.¹³

Cardone’s Response

Cardone has called the lawsuit “frivolous” and said no investor has suffered financial damage. He has noted that he offered to return the original plaintiff’s $10,000 investment.¹⁴

Where the Case Stands and What Investors Should Do

The case is back before Judge John F. Walter in the Central District of California. No trial date has been set, no findings of liability have been made, and all claims remain allegations at this stage.

If you bought interests in Cardone Equity Fund V or Cardone Equity Fund VI through their public offerings, you are within the proposed class unless you opt out. The class notice sets an opt-out deadline of July 14, 2026.¹ Directors, officers, employees, and agents of the defendants are excluded from the class.

1
Cardone Class Action. Pino v. Cardone Capital Short Form Notice
2
CourtListener. Christine Pino v. Cardone Capital LLC
3
U.S. Court of Appeals for the Ninth Circuit. Pino v. Cardone Capital, LLC, No. 23-3512
4
U.S. Securities and Exchange Commission. Cardone Equity Fund V, LLC Form 1-A Offering Circular
5
Class Law Group. Cardone Equity Fund Class Action Lawsuit
6
InvestmentNews. Court Revives Lawsuit Over 15% Fund Return Promise
7
The Real Deal. Lawsuit Seeking Class Action Status Accuses Grant Cardone of Misleading Investors
8
HSF Kramer. Ninth Circuit Addresses the Scope of Section 12(a)(2) Liability for Misleading Opinion Statements Under Omnicare
9
KMK Law. Ninth Circuit Warning: Silence in the Face of SEC Comment Letters May Bolster Section 12(a)(2) Claims
10
U.S. Securities and Exchange Commission. Cardone Equity Fund V, LLC Form 1-K Annual Report
11
StreetInsider. Form 1-SA Cardone Equity Fund V, For Jun 30
12
Stanford Law School Securities Class Action Clearinghouse. Cardone Capital, LLC Securities Litigation
13
Duane Morris LLP. Ninth Circuit Clarifies Viability of Section 12(a)(2) Misstatement Claims Under Omnicare
14
Yahoo Finance. Grant Cardone’s Previously Dismissed Lawsuit Revived by Appeals Court