Our attorneys are investigating claims on behalf of investors of LJM Preservation and Growth Fund (LJMIX) for possible violations of federal securities laws.  The Mutual Fund, which is marketed and sold as aiming “to preserve capital, particularly in down markets (including major market drawdowns), through using put option spreads as a form of mitigation risk”  suffered a massive loss, plunging by more than 80% on February 7, 2018.  On February 8, 2018, the Fund announced that it would be shutting its doors to new investment.

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Class Action Complaint Filed Alleging Violations of Federal Securities Laws

On February 9, 2018, a class action lawsuit was filed on behalf of LJMIX investors alleging that Defendants violated provisions of the Securities Act by issuing false and misleading statements to investors, including in filings with the SEC. Specifically, it is alleged that Defendants made false and/or misleading statements or failed to disclose that LJMIX was not focused on capital preservation and left investors exposed to an unacceptably high risk of catastrophic losses. In addition, it is alleged that Defendants violated the law by failing to disclose that LJMIX had not taken appropriate steps to preserve capital in down markets.

“Clearly, the process failed.”

LJM is described as a class of mutual fund pitched as bringing hedge fund-like strategies to a broader swath of investors. It used options to bet on markets remaining calm and told investors that the strategy offered an alternative to traditional stock and bond investing.

According to media reports,  “The [portfolio manager] described to us several processes he had in place at the open-end fund that would limit losses,” said Gretchen Rupp, an analyst at Morningstar. “We discussed the risk management process with the PM and their risk officer at length. Clearly, the process failed.”

The fund had proved popular in recent months, attracting more than $100m in new cash in December alone, according to Morningstar data.

Girard Gibbs' Financial Fraud Experience

Girard Gibbs’ financial fraud and securities lawyers have more than two decades of experience prosecuting fraud. Our attorneys have successfully litigated against some of the largest companies in the United States, and we have recovered more than a billion dollars on our clients’ behalf.

We have fought some of the most complex cases brought under federal and state laws nationwide, and our attorneys have been recognized with numerous awards and honors for their accomplishments, including Top 100 Super Lawyers in Northern California, Top Plaintiff Lawyers in California, The Best Lawyers in America, and rated AV Preeminent (among the highest class of attorneys for professional ethics and legal skills).

Noteworthy Financial Fraud Cases

American Express Financial Advisors Securities Litigation $100 million cash settlement for clients alleging American Express steered them into under-performing “shelf space funds” to reap kickbacks
Chase Bank “Check Loan” Litigation $100 million settlement for consumers alleging Chase offered long-term fixed-rate loans, only to later more-than-double required payments
Peregrine Financial Group Customer Litigation Settlements worth $75 million for futures and commodities investors who lost millions in the collapse of Peregrine Financial Group, Inc.
NantHealth Court-appointed Co-Lead Counsel in a securities class action alleging the company’s founder violated federal securities law and artificially inflated stock prices

Our Team

Eric Gibbs

Eric has served in leadership positions in a number of high profile, complex financial lawsuits. He’s been named a Law360 Consumer Protection MVP, to Daily Journal’s “Top Plaintiff Lawyers in California”, and to the Top 100 Super Lawyers in Northern California.

A.J. De Bartolomeo

A.J. has served in leadership positions in a variety of complex cases involving securities, consumer protection and bankruptcy issues.

David Stein

David’s advocacy has generated major recoveries for consumers impacted by financial fraud. He was named to the Top 40 Under 40 by Daily Journal and a “Rising Star in Class Actions” by Law360.

Michael Schrag

Michael has over 20 years of experience representing individuals in complex cases involving banking credit card and other financial frauds.