Yieldstreet Lawsuit: $9M Settlement, SEC Case, FINRA Claims

The main Yieldstreet lawsuit is Tecku v. YieldStreet Inc., a federal securities class action filed in the Southern District of New York that accused the alternative-investment platform and co-founder Michael Weisz of misleading roughly 1,200 investors about the risks of its high-yield private deals between 2018 and 2020. The case settled in early 2025 for up to $9 million.¹²³ Yieldstreet rebranded to Willow Wealth in October 2025.⁴

What the Class Action Alleged

The complaint in Tecku et al. v. YieldStreet Inc. et al. (Case No. 1:20-cv-07327) laid out seven causes of action, including fraudulent inducement, securities fraud under Section 10(b), control-person liability against Weisz under Section 20(a), breach of fiduciary duty, and negligent misrepresentation.⁵ The core allegation was that Yieldstreet’s private placement memoranda and series note supplements contained false statements and omitted information investors would have wanted.

Four specific misrepresentations anchored the case:

Offering documents in 2018 and 2019 stated that no investment on the platform had “ever lost any principal,” even though a Rideshare Fund had already defaulted with principal outstanding, a fact Weisz had acknowledged in a 2017 email.⁶
In the vessel deconstruction funds, plaintiffs alleged Weisz abandoned the industry-standard lending model in favor of higher-fee, short-term loans, ignored warnings from the company’s own experts about a “structural mismatch,” and concentrated exposure in a single borrower group called North Star. About $90 million in these marine loans ultimately defaulted.⁵
An oil and gas fund’s offering documents reported gas production of about 13.5 million cubic feet per day, nearly double the figure Yieldstreet later disclosed.⁵
A post-war and contemporary art fund promised investors a “first priority lien” on artworks worth $13.7 million, but other lenders had competing liens on the same collateral.⁵

On May 3, 2022, Judge Victor Marrero denied Yieldstreet’s motion to dismiss in full, allowing all seven claims to proceed. The court found a “strong inference” that management had knowingly ignored specific expert warnings, and it rejected the argument that boilerplate risk warnings in the offering documents excused allegedly false performance data. Once a company chooses to speak about its due diligence and track record, the court said, it has a “duty to be both accurate and complete.”⁶

The $9 Million Settlement

Rather than go to trial, the parties settled. Judge Marrero granted preliminary approval on October 29, 2024, and entered final judgment with dismissal on February 21, 2025. The deal is worth up to $9 million: $6.2 million in cash into a gross settlement fund, plus Yieldstreet’s agreement to forgo fees totaling up to $2.75 million.⁷

The class covered roughly 1,200 investors who bought specified Yieldstreet products, particularly the marine vessel offerings, between 2018 and 2020.⁸ The court also approved class counsel fees of $2,066,666.67 (one-third of the cash) plus $196,529.19 in expenses.⁷ As part of the settlement, Yieldstreet committed to improved disclosure and risk-assessment practices going forward. Claims were administered by Postlethwaite & Netterville through ysclasssettlement.com.⁹

For many investors, the payout was a fraction of their losses. One CNBC-quoted investor said he received $16,000 from the class settlement against a $180,000 investment on which he lost more than 90%.¹⁰

The Separate SEC Case

Outside the class action, the SEC brought its own enforcement action. On September 12, 2023, it announced Yieldstreet Inc. and YieldStreet Management LLC had agreed to pay more than $1.9 million in penalties, disgorgement, and interest to settle findings that the company violated federal antifraud provisions.²

The SEC focused on a single $14.5 million asset-backed offering from September 2019, secured by a loan for scrapping a retired ship. Before the offering, according to the agency, Yieldstreet already had information that other ships collateralizing loans to the same borrowing group had been deconstructed without repayment or notice, or had gone missing after their tracking systems were disabled. Yieldstreet didn’t pass those red flags on to investors, and the borrower ultimately scrapped the ship and kept the proceeds. Yieldstreet settled without admitting or denying the findings.²

A separate 2020 FBI and SEC investigation into the company produced no criminal charges against Yieldstreet or its executives.¹¹

Where the Investor Losses Came From

The lawsuits sit on top of a much larger loss picture. Total investor losses across Yieldstreet offerings now stand at at least $208 million.³

Marine Finance

Yieldstreet placed investors into $89 million of loans to fund the scrapping of 13 ships, with the vessels themselves as collateral. After the Dubai-based borrower group, connected to the Lakhani family, defaulted, Yieldstreet lost track of the ships entirely and sued for fraud.¹⁰ The company won large judgments abroad, including a $76.7 million summary judgment against three personal guarantors in the British High Court in October 2020, but was unable to collect because the borrowers concealed their assets.¹² In August 2025, Yieldstreet told investors it had reached a $5 million settlement with the defaulting borrowers and warned that because recovery costs “well exceeds the entire settlement amount,” investors were unlikely to see any repayment.

Real Estate

Real estate has produced the second wave. A CNBC review of 30 Yieldstreet real estate deals as of August 2025 found four total losses, 23 on a company watchlist, and three technically active but no longer making scheduled payouts. Those 30 projects had recognized $78 million in defaults in the prior year.¹³ Specific wipeouts included a Nashville luxury apartment project at 2010 West End Avenue, declared a “complete loss of capital” in May 2025 and later sold to Tishman Speyer;¹⁴ a New York Upper West Side project in which investors lost $15 million after Yieldstreet “sold our position for $1”; and the Alterra Apartments in Tucson, in technical default and heading to a full write-off. In December 2025, the company disclosed an additional $41 million in losses from defaulted projects in Houston and Nashville.³ Annualized real estate returns fell from 9.4% as reported in 2023 to negative 2% across 2015–2025. A real estate investment trust holding six of the firm’s projects was shut down in 2025 after its value nearly halved, locking investor capital for at least two years.

Individual FINRA Arbitration Claims

Investors who fell outside the class period, or who want to pursue recovery beyond the settlement, have another route. Multiple law firms are bringing individual claims against YieldStreet Management LLC through FINRA arbitration on theories that include unsuitable recommendations, misrepresentation and omission of material facts, failure to conduct reasonable due diligence, supervisory failures, and undisclosed conflicts of interest from the fees Yieldstreet earned for originating and managing the deals.¹⁵ In July 2025, investor Justin Klish, who reported $400,000 in losses across two real estate projects, filed a formal complaint with the SEC alleging the company misled investors.¹³

The Willow Wealth Rebrand

The company you’re researching now operates under a different name. On October 22, 2025, Yieldstreet announced it was changing its name to Willow Wealth, describing the move as reflecting its evolution from a platform where investors picked individual deals into one offering broader private-market portfolios, with accounts and user experience unchanged.⁴ Boston University finance professor Mark Williams told CNBC the Yieldstreet name had “negative value” and the rebrand was an attempt to “restart things” and put distance between the company and its history of investor losses. Customers quoted in the reporting called the move an effort to “evade accountability.” During the rebrand the company also removed roughly a decade of historical performance data from its public website, including the chart showing negative real estate returns.¹⁶

Mitch Caplan, a former E-Trade chief, took over as CEO in May 2025. Original co-founders Michael Weisz and Milind Mehere remain on the board. Under Caplan, the firm has shifted toward distributing private market funds run by outside managers such as Goldman Sachs, Carlyle Group, and StepStone Group rather than sourcing its own deals. A Willow Wealth spokeswoman described recent critical reporting as a “rehash” of old news and said the troubled investments represent a “very small portion” of the overall portfolio.¹⁶

1
Law360. Tecku et al v. YieldStreet Inc. et al
2
SEC. SEC Charges YieldStreet for Failing to Disclose Material Information
3
InvestmentNews. Yieldstreet, Now Willow Wealth, Racks Up More Losses for Investors
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Willow Wealth. Yieldstreet Is Becoming Willow Wealth
5
S.D.N.Y. Tecku et al. v. YieldStreet Inc. et al., No. 20 Civ. 7327
6
A&O Shearman. New York District Court Denies Motion to Dismiss Putative Securities Class Action Against Investment Platform
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PACER Monitor. Tecku et al v. YieldStreet Inc. et al
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Investor Claims. Yieldstreet Lawsuit Reaches $9M Settlement
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YS Class Settlement. Tecku, et al. v. Yieldstreet, Inc., et al. Settlement
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CNBC. Yieldstreet Marine Loan Deals Customer Losses
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AltStreet Investments. CrowdStreet vs. Willow Wealth Comparison
12
7KBW. 7KBW Team Secures Summary Judgment for YieldStreet on US$76.7 Million Personal Guarantee Claim
13
CNBC. Yieldstreet Real Estate Bets Customer Losses
14
Bisnow. Yieldstreet Investors Report Massive Losses From Failed Real Estate Bets
15
PR Newswire. Zamansky LLC Investigates Yieldstreet Losses
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CNBC. Yieldstreet Investors Losses, Willow Wealth Rebrand