National investment fraud lawyers KlaymanToskes is investigating LJM Funds Management, Ltd. and LJM Partners, Ltd. following an SEC filing of a civil action alleging that two of its executives implemented an unsuitable and misleading options trading strategy in their mutual fund, LJM Preservation and Growth, and other private investment funds.
Investors that suffered losses in LJM Preservation and Growth Fund, or other LJM products at the advice of a full-service brokerage firm or financial advisor are encouraged to contact our law firm immediately. You may be entitled to a financial recovery through a FINRA arbitration claim.
According to the SEC Complaint, LJM’s portfolio managers Anthony Caine and Anish Parvataneni fraudulently misled both investors and the board of directors regarding the firm’s risk management practices and the level of risk in LJM’s portfolios, which suffered a collective loss of over $1 billion in 2018.
The SEC complaint describes the LJM Preservation and Growth Fund as a “short volatility strategy” that generated revenue using margin to “sell out-of-the-money options on S&P 500 futures contracts.” The named executives claimed to have stress-tested portfolios to estimate “worst-case daily losses” of 20% for the preservation and growth fund and 30 to 35% for private funds, convincing investors that they would “maintain consistent risk levels.” The SEC’s investigation has since determined that these claims were fabricated.
The executives profited millions from their fraudulent conduct, with the complaint stating that “LJM Management’s advisory fees grew 400% from 2015 to 2017.” Additionally, Parvataneni’s bonus in 2017 exceeded his 2015 bonus by almost 400% and Caine received distributions from LJM totaling over $15 million. LJM’s Chief Risk Officer, Arjuna Ariathurai settled related charges with the SEC and received a civil penalty of $150,000, disgorgement and prejudgment interest of $97,444, and an associational bar with the right to reapply in three years time.
KlaymanToskes encourages investors who purchased LJM Funds Management, Ltd. and/or LJM Partners, Ltd. to review their portfolios for signs of broker misconduct and/or investment losses.
Investors that suffered losses should contact attorney Lawrence L. Klayman, Esq., at 888-997-9956, or lklayman@klaymantoskes.com.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lklayman@klaymantoskes.com
www.klaymantoskes.com