National investment loss lawyers KlaymanToskes is investigating brokerage firms and financial advisors who unsuitably recommended investments in Hatteras Investment Partners L.P. Funds to their customers. Hatteras reportedly sold their funds to the Beneficient company in 2021, which is tied to GWG Holdings. In April 2022 GWG Holdings, Inc. filed for Chapter 11 bankruptcy (Case No. 22-90032), suspending their monthly dividends of GWG L Bonds, and leaving investors without access to their principal.
A class action complaint filed on April 17, 2024 in The State of Delaware’s Court of Chancery alleges that Hatteras’ directors breached their fiduciary duty by selling their funds to Beneficient without informing investors. This purportedly allowed Hatteras’s directors an opportunity to redeem their investments before the transaction went through.
Investors should know that class-actions may take many years to resolve, and that payouts are generally heavily undervalued. KlaymanToskes previously conducted a detailed study of securities arbitration versus class action and concluded that Financial Industry Regulatory Authority (“FINRA”) arbitration claims traditionally obtain an overall higher rate of recovery as opposed to participating in a class action lawsuit.
Accordingly, investors should consider all their legal options, including filing a securities arbitration claim with FINRA, against the brokerage firm who recommended the purchase of Hatteras Investment Partners Funds. A FINRA arbitration claim may result in a greater and additional recovery.
If you suffered losses in Hatteras Investment Partners Funds, or any other investments due to unsuitable recommendations by your brokerage firm or financial advisor, contact securities attorney Steven D. Toskes to discuss your recovery options at (888) 997-9956 or investigations@klaymantoskes.com for a free and confidential consultation. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
Hatteras Investment Partners is an investment advisory firm that was founded in 2003. KlaymanToskes is currently investigating the following Hatteras Investment Partners investment offerings:
In December, 2021, Hatteras’ Board of Directors approved a liquidation plan that exchanged $400 million of investments in their funds for an equal amount of Beneficient preferred shares. According to Hatteras’ SEC filings, on December 7, 2021, the Hatteras Master Fund, L.P. exchanged interests in the Adviser Funds for Beneficient Preferred Series B-2 Unit Accounts and entered into a Registration Rights Agreement with the Beneficient Company Group, L.P.
At the time the liquidation plan was approved, Beneficient preferred shares were valued at $10 per share. Currently, Beneficient (NASDAQ: BENF) is trading at around $5 per share. Hatteras’ board believed Beneficient would hold an initial public offering (IPO), but it went public in June 2023 by merging with Avalon Acquisition Inc, a SPAC (special purpose acquisition company). Hatteras’ SPAC merger was expected to be worth $3.5 billion, converting Hatteras’ preferred shares to $8 per share Beneficient Class A common stock, however, Beneficient stock went on to fall to about $0.08 per share, leaving investors with a near-total loss.
Hatteras’ directors have reportedly recently admitted that they failed to perform adequate due diligence into Beneficient and find misconduct by its founder Brad Heppner that had caused the SEC to investigate the company. Financial professionals and their firms have a fiduciary duty to recommend suitable investments that are in their customer’s best interest.
The brokers and financial advisors responsible for selling Hatteras Investment Partners Funds may be held responsible for any financial losses sustained by investors. Brokerage firms and financial advisors must consider their client’s risk tolerance prior to making recommendations, and cannot overconcentrate their customers’ accounts in any one investment product or market sector.
KlaymanToskes is a leading national securities fraud law firm that represents the interests of investors throughout the world who have suffered losses due to broker misconduct, investment fraud, and securities violations.
The article linked below contains important information relating to KlaymanToskes’ investigations of Hatteras Investment Partners Funds:
If you suffered losses in Hatteras Investment Partners Funds, or any other investments, contact securities attorney Steven D. Toskes to discuss your recovery options at (888) 997-9956 or fill out a short contact form for a free and confidential consultation.
The firm has helped recover over $600 million for investors (exclusive of attorneys fees and costs), and can help you determine if your loss is due to financial advisor misconduct, unsuitable investment advice, and/or other securities violations.
Potential conflicts of interest may arise when issuers incentivize brokers/investment advisors with substantial commissions to promote their financial products. A problem often associated with alternative fund investment recommendations is the high sales commissions brokers typically earn for selling these investments, which can be as high as 15%. A representative that recommends investments for the purpose of being compensated through increased commissions, and enriches themselves rather than benefiting the client, is violating securities laws.
To recover investment losses, you do not go through the traditional court system with a lawsuit. The only remedy is through a FINRA arbitration, a specific process designed for these types of disputes. This process involves presenting your case to a panel set by the Financial Industry Regulatory Authority (FINRA), not a courtroom. This approach is streamlined and focused on investment disputes, making it a suitable and effective way for investors to seek compensation for losses caused by financial advisors or brokerage firms.
FINRA (the Financial Industry Regulatory Authority) is a self-regulatory organization that oversees brokers and brokerages. In the event of a dispute between an investor and their financial advisor, investors can choose to file a FINRA arbitration claim. FINRA is overseen by the Securities and Exchange Commission (“SEC”).
The arbitration process is designed to be much faster than the court system and allows both parties to present their case before a panel of arbitrators. The arbitrators will then decide how to resolve the dispute, including ordering the advisor to pay damages for any losses suffered by the investor.
If you suffered losses in Hatteras Investment Partners Funds or other investment losses, you are encouraged to contact attorney Steven D. Toskes, at 888-997-9956 or by email at investigations@klaymantoskes.com to discuss recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
As an investor, there are signs that you should look out for if you believe you have a claim against your broker/investment advisor for unsuitable investment recommendations in Hatteras Investment Partners Funds. These signs could potentially indicate misconduct, negligence, or investment fraud. Investors are encouraged to contact our firm immediately if you have experienced any of the following:
Some investors have close relationships with their brokers due to the time and trust built over the course of their investment relationship. However, it is crucial to remember that financial decisions should be based on careful analysis and due diligence rather than solely relying on personal relationships.
Engaging the services of an experienced securities attorney to evaluate your specific circumstances is strongly advised. At KlaymanToskes, our team of experienced securities attorneys has a deep understanding of this complex area of law, allowing us to provide invaluable insight and tailored guidance that directly addresses your individual needs.
If you purchased Hatteras Investment Partners Funds, or any other unsuitable investments through your financial advisor/brokerage firm, and suffered significant losses, contact KlaymanToskes at 888-997-9956 or fill out a short contact form for a free and confidential consultation. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.