Grant Cardone Class Action Lawsuit Gets Tossed Out
For the second time in two years, a class action lawsuit against multifamily mogul and social media influencer, Grant Cardone, fizzled out.
Los Angeles Federal Judge John Walter last week dismissed the complaint against Cardone, his Aventura-based firm Cardone Capital and two real estate funds, filed by Christine Pino. Walter ruled that Pino could not file an amended complaint, effectively putting the kibosh on her legal claim.
She had taken over a legal fight initiated by her father, Luis Pino, who died in June.
In 2020, Luis Pino, an Inglewood, California resident who invested $10,000 in the two funds a year earlier, filed the first class action lawsuit against Cardone and his entities. After Luis Pino’s complaint was dismissed, an appeals court reinstated the lawsuit last year. Christine Pino was named the new plaintiff in an amended filing in June.
Cardone celebrated the dismissal of Christine Pino’s lawsuit by posting a video on his YouTube channel lashing out at The Real Deal, other media outlets and YouTubers for reporting about his legal troubles and controversies. “You guys at The Real Deal pretend to be a real estate magazine,” Cardone said. “You pretend to be a real estate source of information. When in truth everybody in the real estate space knows you guys just drag on negative news.”
In a phone interview, Cardone told TRD that Luis Pino is the only investor to sue him out of nearly 14,000 people who have invested with him. “I did a Zoom call with all my investors and asked who would like to join the class action lawsuit,” Cardone said. “I am completely transparent. There was no misrepresentation. There was no over-promotion.”
He spent more than $1 million defending against the lawsuit, he added. “The damage this has done to me, my name, my employees, my companies, my partners and my investors has been immeasurable,” Cardone said. “I am over here trying to build a business as best that I can. I am trying to give an everyday family a shot at the best real estate investment possible. It comes with risk.”
The Pinos’ lawsuit centered on Cardone’s sales tactics in recruiting investors on his social media accounts, which have more than 10 million followers combined. Through YouTube, Instagram, Facebook, Twitter and other platforms, Cardone crowdfunded $50 million for both real estate funds between 2019 and 2020, court documents state. At the time the funds were created, Cardone was managing a multifamily real estate portfolio consisting of over 4,500 units in 20 communities, valued in excess of $700 million.
Today, the portfolio has grown to 12,230 apartments across 37 multifamily properties, along with over 500,000 square feet of commercial office space, according to Cardone Capital’s website. Cardone claims the portfolio is now worth $4 billion.
The Pinos’ lawsuit alleged that Cardone misled investors on social media by allegedly over-promising investor returns, downplaying their financial liability and not fully disclosing the fees he collected. Cardone also allegedly refused to adjust his sales tactics despite receiving a warning from the Securities and Exchange Commission that his promises to investors that they would realize returns of 15 percent “did not appear to have a factual basis,” the lawsuits alleged.
In his ruling, Walter determined that Christine Pino’s lawsuit “disclaimed any and all allegations of fraud,” so she could not argue that Cardone “did not honestly believe in the statements” about the returns and potential distributions to investors. Walter also ruled that Cardone’s social posts did not provide proof that he wasn’t forthright about investors being on the hook for debt obligations, as well as fees Cardone Capital was paid.
As part of his online spiel, Cardone regularly shows off his ostentatious lifestyle on social media, such as posting videos of boarding his private jet and showing off his collection of Richard Mille designer watches. In 2021, Cardone paid $24 million to fashion designer Tommy Hilfiger for a Golden Beach mansion. A year later, he dropped $40 million for a beachside home in Malibu.
