LJM Preservation and Growth Fund Share Price Plummets
LJM Preservation and Growth Fund Share Price Plummets | Goodman & Nekvasil, PA May Recover Losses
LJM Partners is an investment management firm that operates the mutual fund LJM Capital Preservation and Growth Fund (NASDAQ: LJMIX). The investment, “seeks capital appreciation and capital preservation with low correlation to the broader U.S. equity market. Under normal circumstances, the fund invests primarily in purchased (aka ‘long’) and sold (aka ‘short’) call and put options on Standard & Poor’s 500 Futures Index (‘S&P’). The fund seeks to achieve its investment objectives by capturing gains on options sold on S&P futures contracts that can be purchased (‘closed’) at a later date for a lower price than the price realized when originally sold,” according to U.S. News & World Report.
LJM Preservation and Growth Fund Investigation Summary
1. The LJM Preservation and Growth Fund (the LJM Fund) was launched in January 2013. It offered three different share classes (ticker symbols LJMAX, LJMCX, LJMIX).
2. As of October 31, 2017, the LJM Fund had net assets of $768 million.
3. The fund placed massive bets using complicated options strategies that depended on the market remaining calm and not experiencing volatility.
4. LJM Fund’s prospectus states that the objective of the fund is “capital appreciation and capital preservation with low correlation to the broader U.S. equity market”. It appears to be in direct conflict with the investment strategies that were executed.
5. In two days, February 5 and 6 2018, investors in LJM Preservation and Growth Fund lost 80% of the value of their investment or perhaps $600 million in investor money.
LJM Preservation and Growth Fund (LJMAX, LJMCX, LJMIX) is a high-risk, alternative mutual fund that suffered from the VIX [volatility index] spike. According to Barron’s, “the $772 million alternative mutual fund’s share price plummeted from $9.67 to $4.27—a 55.8% decline. To make matters worse, the fund (ticker: LJMAX) didn’t report the loss until late the following day, so shareholders were in the dark as to what happened. And then the fund suffered another, 54.6% fall to $1.94 a share on Feb. 6—a two-day total decline of 80%. “It may be the biggest two-day drop for a mutual fund ever,” says Gretchen Rupp, a Morningstar analyst who covers the fund.”
Many investors have reportedly bought into LJM Preservation and Growth Fund on the recommendation of an investment advisor who, in turn, employed supposed third-party tactical mutual fund allocation through a “sleeves” strategy. The “sleeves” strategy has reportedly been espoused by Horter Investment Management (“Horter”) and marketed to approximately 250 investment advisor representatives. About 210 RIA firms have reportedly established relationships with Horter. Headquartered in Cincinnati, OH, Horter is a SEC Registered Investment Adviser (“RIA”) formed in 1991 with a stated goal of “risk mitigation, capital preservation and minimizing drawdowns so that people don’t get hurt with severe corrections or a bear market.” Horter reportedly offers services as a third-party advisor to other investment advisers
Goodman & Nekvasil, P.A., a Clearwater, Florida, law firm with a national practice representing victimized investors, continues to investigate brokerage firms that placed elderly retirees and other conservative investors in high-risk investments such as LJM Preservation Growth Fund (LJMAX, LJMCX, LJMIX).
Even though LJM Preservation Growth Fund (LJMAX, LJMCX, LJMIX) had considerable risk, overzealous brokers, brokerage firms and registered investment advisors have nonetheless recommended these types of investments to conservative investors seeking income. We believe that investors LJM Preservation Growth Fund (LJMAX, LJMCX, LJMIX) have lost a significant amount of their investment.
Goodman & Nekvasil, P.A., has filed hundreds of cases against brokerage firms selling high-risk investments such as LJM Preservation Growth Fund (LJMAX, LJMCX, LJMIX) and has recovered more than $180 million dollars on behalf of victimized investors. We allege in these cases that these investment recommendations were unsuitable for our clients in view of their financial situation, needs and investment objectives. All our cases are handled on a purely contingency fee basis.
You may have the right to recover your losses from the brokerage firm that sold LJM Preservation Growth Fund (LJMAX, LJMCX, LJMIX) and other high-risk investments to you. We strongly recommend that you act quickly, however, because statutes of limitation can be short in securities cases.
Kalju Nekvasil, Esq., formerly regional counsel with the NASD, now known as FINRA, has practiced in this area of the law for more than 35 years. We would like to discuss the possibility of your retaining our firm to represent you in an arbitration action.
There is no charge for an evaluation of your case. Further, we handle our cases on a contingency fee basis. This means that unless we recover money for you, we charge no attorney’s fee. Unless you recover any money, you pay us nothing, not even the costs and expenses which the firm will advance on your behalf. Finally, the filing of such a case should not affect your ownership of these investments in any way.
If you incurred losses on your investment in LJM Preservation Growth Fund (LJMAX, LJMCX, LJMIX) and/or other high-risk investments and would like your case evaluated by a securities attorney (again, there is no charge for an evaluation and all cases are handled on a purely contingency fee basis), please contact us.
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