CrowdStreet named a new chief executive as the crowdfunding platform deals with internal and external turbulence.
John Imbriglia is taking charge at the Austin-based company, Bisnow reported. Imbriglia will assume the role of chief executive officer on July 15, replacing Jack Chandler, who has served as interim CEO for nearly a year.
Imbriglia arrives from Platform Capital Management, where he was a general partner. He was previously the managing director of alternative investment marketplace iCapital.
In addition to typical business goals — growth plans, strategic directions — Imbriglia plans on opening the company’s first office in New York.
The last permanent CEO of CrowdStreet was co-founder Tore Steen, who helped guide the company towards the top of the real estate crowdfunding market. Steen was ousted in July, however, as the Nightingale Properties scandal that threatens the existence of CrowdStreet exploded.
Nightingale CEO Elie Schwartz allegedly defrauded investors on the platform out of tens of millions of dollars. In October, he agreed to a settlement to pay back $53 million to investors in quarterly installments, likely needing to sell off personal assets to make the investors whole.
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Schwartz allegedly diverted money towards watches and credit card payments, according to forensic accounting. He also allegedly spent $12 million on First Republic Bank stock and options almost immediately before the bank’s failure. Schwartz has been struggling to meet his scheduled payments dictated by the settlement.
The scandal could lead to the demise of CrowdStreet. Investors filed an arbitration claim with the Financial Industry Regulatory Authority. In addition to more than $3 million in damages, the investors are seeking an injunction that would stop the website from marketing or selling securities, which would effectively halt operations.
On a less existential level, CrowdStreet is also dealing with a drop of deal volume due to high interest rates. As of last month, there was only one crowdfunding deal on the platform.