Category Archives: Hedge Funds

Losses On LJM Preservation and Growth Fund May Be Recoverable

April 2018

We are currently reviewing potential claims for investors who suffered losses in  LJM Preservation and Growth Fund (LJMIX & LJMCX) securities.

Once close to a billion dollars, the LJM Preservation and Growth Fund lost over 80% of its value in the first week of February 2018 and is closed to further investment, according to filings with the US Securities and Exchange Commission.

The fund was managed by Anish Parvataneni and Anthony Caine. According to the firm website the fund invested in long and short options on the S&P 500 Index futures that seek to profit, primarily, from the volatility premium-the spread between implied and realized volatility.

According to analysts following the fund, the strategy  of the LJM Preservation and Growth Fund was to sell naked put options on S&P futures.

Put Option

A “put” option is a contract granting the right to the buyer to sell a security at a specified price (strike price) , allowing the buyer to hedge a position. The seller of a put option  is betting the price of the security will remain higher than the strike price of the option. If the seller doesn’t own the security on which the option is written, that is called naked option writing and the downside risk is magnified greatly.

If a downward market adjustment occurs, as it did in the first week of February 2018, losses can be catastrophic. These charts show the dramatic drop in value on two of the LJM funds:

Brokers Have Duty to Make Suitable Recommendations

Brokers have a duty to make suitable recommendations taking into account an investor’s health, age, level of financial sophistication , tolerance for risk and investment objectives. For most retirees, a recommendation to invest in an investment that could experience such a dramatic drop in value would not be suitable. Investors may have been unaware of the risks associated with an investment in the LJM Preservation and Growth Fund, given the apparent misuse of the word “Preservation” .

Losses May be Recoverable

If you have losses in the LJM Preservation and Growth Fund and believe you were misled as to the risks, contact for a no charge consultation us to learn how damages may be recoverable through FINRA arbitration.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

FSC Securities Hit with $1.28M Award For Aubrey Lee Price Ponzi Scheme

Aubrey FSC brokerAugust 11, 2015 -Atlanta, Georgia

An arbitration panel of the Financial Industry Regulatory Authority (FINRA) awarded $1.28 million to a group of individuals who were victims of a ponzi scheme conducted by Aubrey Lee Price, a former FSC Securities broker. FINRA Case# 14-02355.

Price , who went from devout Christian minister and trusted financial adviser, was registered with FSC Securities in McDonough, GA,  from 2006-2008. He made headlines when, after his scheme was uncovered,  he faked his suicide on a boat in Key West, FL, in 2012.  See this FBI story “The Fraudster Who Faked His Own Death: Inside the Aubrey Lee Price Case” for more details.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Mark Malik Indicted In New York- Charged with Securities Fraud

February 15, 2015- Long Island, New York

Mark Malik (aka Moazzam Ifzal Malik) age 33, of Lahore Pakistan, was indicted and charged with stealing over $250,000 from five investors in connection with a purported hedge funds Seven Sages Capital, Wall Street Creative Partners, American Bridge Investments and Wolf Hedge , according to N.Y. Attorney General Eric T. Schneiderman. 

Victims are located in New York, Florida, Texas, Canada and Switzerland. Here is a link to Malik’s website. 

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Dean Mustaphalli Fund Losses ?

Rex Securities Law is investigating former broker Dean S. Mustaphalli of Forest Hills, NY, who was last registered with Sterne Agee Financial Services from 12/2009-9/2011.

On December 15, 2015, the Financial Industry Regulatory Authority (FINRA) entered an Order Accepting Offer of Settlement in Disciplinary Proceeding No 2013036880302 in which Mustaphalli consented to the entry of findings and violations consistent with a complaint filed against him by FINRA and the entry of sanctions.

Findings in the complaint include:

  • In 2011, Mustaphalli formed and managed a hedge fund which raised $6 million and received  compensation for managing the fund but failed to provide written notice or receive written acknowledgement from his employer member firm
  • Mustaphalli failed to timely provide a list of the hedge fund clients or unredacted account statements to FINRA in connection with their investigation into his activities.

Mustaphalli was suspended for two years, assessed a fine of $20,000 and ordered to disgorge management fees of $41,800.

If you suffered losses as a result of investments you made with Mustaphalli, contact us to learn your legal options.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Nikolai Battoo & His Companies Hit With $358 Million In Sanctions

The SEC announced that on September 30 ,2014, Judge Edmond E. Chang, U.S. District Court of Illinois Eastern Division issued and order and final judgment by default against Nikolai Battoo and two of his companies BC Capital Group S.A. (Panama) and BC Capital Group Limited (Hong Kong)

A permanent injunction was imposed as well as disgorgement, interest and penalties of $358 million.  Battoo was a hedge fund manager who defrauded investors worldwide in a fraud that began around 2008. Battoo, who raised hundreds of millions in the U.S. in Private International Wealth Management (PIWM),  concealed the fact that he had suffered huge losses by sending out fraudulent account statements.

The SEC had charged Battoo, his companies and marketing chief Tracy Lee Sunderlage in 2012. In August 2014, they charged Julian Brown and his company Alliance Investment Management Limited for their role in the Battoo fraud.

If a licensed broker made the recommendation for you to invest in Private International Wealth Management , Alliance Investment Management Limited, B.C. Capital Group, the Anchor Funds, Galaxy Fund, Phi R Squared funds, FuturesOne Diversified funds or any other company a part of the Battoo fraud, call to learn how you may be able to recover damages.

Rex Securities Law provides nationwide representation to investors seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.  Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Rex Securities Law

561 391 1900