Lawsuit Filed Against EMERSON EQUITY LLC & JOSHUA D CHAPIN

Soreide Law Group has filed a FINRA arbitration on behalf of their client (Claimant) against:

EMERSON EQUITY LLC, and their registered representative, JOSHUA DAVID CHAPIN (Respondents).

The Claimant is married, retired, and living in California. The Claimant is no longer able to work due to health issues he has been dealing with for the past ten years. The Claimant built up a property portfolio on his own over decades and wanted to spend less time managing the properties while deferring taxes on the exit, as he is no longer able to work.

According to the lawsuit, the Claimant was referred by a friend to EMERSON EQUITY broker JOSHUA DAVID CHAPIN (JOSHUA D CHAPIN). CHAPIN has been registered both as a broker and as an investment advisor with EMERSON EQUITY LLC of Irvine, California, since November of 2015.  

Allegedly, JOSHUA D CHAPIN recommended the Claimant place his properties in a Delaware Statutory Trust (DST). The DST can purchase fractional ownership in properties that are 1031 qualified without having to own the whole property. The lawsuit alleges that JOSHUA D CHAPIN made this process seemingly easy and claimed it to be safter than owning and controlling the whole property. However, the lawsuit alleges it was not fully explained to the Claimant that there was significant costs which include; acquisition cost, asset management, disposition fees, and broker commission, which means the total cost can be between 15-18% of the property value.

Given the fractional ownership one would maintain, liquidity is a huge challenge to exit the investment as no secondary market exists. Given DST’s tax structure, failed DSTs, are prohibited from renegotiating existing loans or seeking new financing or taking on new debt after closing, given they must have a predefined loan term and that can only be renegotiated or refinanced in bankruptcy.

The lawsuit alleges JOSHUA D CHAPIN recommended the Claimant exit his entire real estate portfolio in July of 2023 and invest $3.4 million dollars into two DSTs. The lawsuit states that $1.3 million was invested into Inspired Senior Living of Dartmouth DST (Darthmouth) and $2.1 million into Inspired Senior Living of North Haven DST (North Haven).  North Haven represented a 6.8333% ownership interest and Darthmouth a 5.1117% ownership interest. The lawsuit claims that less than two years later both investments ceased to pay any distributions in June of 2025 and are totally illiquid.

The Claimant allegedly was also advised to purchase two other Exchange Right NNN 63 DST for $2,276,000. Those investments are currently performing but given the 50% failure rate of the DSTs the Claimant realized these aren’t the safe, secure, guaranteed vehicles he was allegedly promised.

The lawsuit claims that the Claimant was looking for low risk tax advantaged investment strategy to generate income to sustain him through retirement and his rising cost of medical care.

EMERSON EQUITY LLC and their representative, JOSHUA D CHAPIN’s actions, the lawsuit alleges, have caused damages to the Claimant of an unspecified amount to be determined. The Respondents have yet to file an answer to this FINRA arbitration, but it is anticipated that the Respondents will deny any wrongdoing.  The lawsuit alleges negligence, breach of fiduciary duty, and negligent supervision.

According to FINRA’s BrokerCheck, available to the public on FINRA’s website, JOSHUA D CHAPIN has been in the securities industry for 14 years and has been listed with 5 firms.

Delaware Statutory Trusts (DSTs) are often promoted to retirees and income seeking investors.  When in fact, they are highly speculative and pose risks. Some of the many risks are Illiquidity, high fees, market risks and suitability. Inspired Senior Living of Dartmouth DST, is a Reg D real estate private placement affiliated with Inspired Healthcare Capital based in Arizona. In July of 2025, Inspired Healthcare Capital suspended new investment offerings and halted their investor distributions, due to an ongoing regulatory review by the US Securities and Exchange Commission (SEC). Inspired Senior Living of North Haven DST, is also a Reg D real estate private placement affiliated with Arizona-based Inspired Healthcare Capital which can also be categorized as a high-risk, illiquid private placement.

To discuss this article or any other securities issues, particularly those relating to DSTs, contact Soreide Law Group and speak to an experienced securities at no cost:  888-760-6552.

Soreide Law Group represents our clients nationwide before FINRA on a contingency fee basis.  There will be no fee to you if no recovery.