Self-Directed IRAS-BEWARE

As many of you know, our firm serves as lead counsel in a class action suit filed in Raleigh, North Carolina against Ephren Taylor and other defendants including an entity called Equity Trust. See Lee v. Taylor, et al, Case Number 5:11-cv-00547-BO. One of the issues in that case is the liability of the self-directed IRA custodian, Equity Trust. Although the complaint concerns allegations about Equity Trust's activities as a co-conspirator in the sale of unlicensed securities through a Ponzi scheme and not its duties as a self-directed IRA custodian, the case again raises the issue of whether self-directed IRA custodians require more scrutiny and should be regulated. Over the next few weeks we will be examining cases involving fraudulent investment schemes, particularly Ponzi schemes, and the attraction of using self-directed IRAs to perpetuate those schemes.