Category Archives: Hedge Funds

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PLATINUM PARTNERS LP INVESTOR ALERT – Notice to Investors Who Purchased Platinum Partners LP Hedge Funds through Financial Advisors and Brokerage Firms: The Securities Arbitration Law Firm of Klayman & Toskes, P.A. Opens Investigation

By | Featured Investigations, Hedge Funds | No Comments

New York, New York (Globe Newswire) — August 17, 2016 — The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, has opened an investigation into potential Financial Industry Regulatory Authority (FINRA) sales practice violations by financial advisors and brokerage firms related to the Platinum Partners Value Arbitrage Fund and the Partners Credit Opportunities Fund.  This investigation follows a recent letter sent to Platinum Partners investors that the hedge funds would be liquidated and reports that the  Securities and Exchange Commission (SEC) has begun an investigation of Platinum Partners for bribery and fraud.

According to K&T founder, Lawrence L. Klayman, “Our investigation focuses on whether investors were advised by their financial advisors to invest in Platinum Partners LP hedge funds, as a part of  ‘selling away’ transactions.  Selling away transactions are broker-advised investments that are not approved by their brokerage firms.”  Mr. Klayman explains, “Brokerage firms who fail to supervise the activities of their financial advisors may be held responsible.”

K&T is conducting an investigation to determine whether brokerage firms violated FINRA sales practice rules related to the Platinum Partners Value Arbitrage Fund and the Platinum Partners Credit Opportunities Fund, including unsuitable recommendations, misrepresentations and omissions of material facts and failure to supervise.   Investors who have information about the sales practices of brokerage firms and their financial advisors are encouraged to contact Lawrence L. Klayman, Esq. or Raymond Gentile, Esq. of Klayman & Toskes at (888) 997-9956, or visit our website at www.nasd-law.com.

About Klayman & Toskes, P.A.

K&T 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 represents high net-worth, ultra-high-net-worth, and institutional investors, such as non-profit organizations, unions, public and multi-employer pension funds. K&T has office locations in California, Florida, New York and Puerto Rico.

What Legal Recourse Exists For Hedge Fund Investors In BlackGold Opportunity Fund LP?

By | Blog, Featured Investigations, FINRA Sales Practice Violations, Hedge Funds, News, Oil & Gas Investments, Securities Arbitration | No Comments

The collapse in oil prices has hit hard investment strategies focused on the oil and energy sector for many investors, both retail and high net worth, accredited investors.  Accredited investors qualify to invest in BlackGold Opportunity Fund, LP through meeting minimum net worth and stated income requirements specified by the SEC Rule 506, Regulation D.  BlackGold Opportunity Fund, LP raised capital through the use of offering documents known as Private Placement Memorandums (PPM).  According to securities industry rules, accredited investor are deemed able to understand and assume risks of investments in BlackGold Opportunity Fund, LP.  However, when an investment advisory firm recommends hedge fund investments in BlackGold Opportunity Fund, LP, are there any duties and obligations owed to clients?

BlackGold Opportunity Fund LP is a credit-oriented hedge fund which invests in securities issued by energy companies across the credit spectrum including bank debt, unsecured debt, bonds, convertible debt, preferred stock.  BlackGold GP LP, as investment adviser is entitled to a performance-based management fee and a management fee.  Both performance-based and management fees are fully discussed in the PPM.  The following investment advisory firms received compensation for investments made in BlackGold Opportunity Fund LP:

  • Avalon Wealth Management, LLC
  • Credit Suisse (USA), LLC
  • Eaton Partners, LLC

Do accredited investors have any legal recourse to recover investment losses given the information and risk disclosures contained in Private Placements Memorandum (PPM) Offering documents?

There are two fiduciary investment advisors involved in the transaction at issue; the hedge fund manager and the investment advisory firm that recommended the transaction and amount invested.  Investment advisory firms have a fiduciary duty to perform competent and unbiased investment advisory services including due diligence review, suitability determinations and performance evaluations for its investment recommendations.  Accredited investors are reasonable to rely upon representations made by investment advisory firms.  Investment advisory firms are not exempt from performing suitability determinations for customers who are accredited investors.

According to the Financial Industry Regulatory Authority (FINRA) rules, suitability determinations are a two step process; first, a reasonable investigation of the private placement’s investment merits must be determined and understood by investment advisors, and second, a “customer specific suitability” determination must be made. After a customer is qualified as an accredited investor, investment advisory firms are required to make a suitability determination taking into consideration a customer’s personal situation.

FINRA securities arbitration claims for damages in BlackGold Opportunity Fund, LP may arise from violations of sales practice rules and regulations.  FINRA rule violations may include concentrated investments in hedge funds caused by misrepresentations or omissions of material facts that are motivated by investment advisor conflicts of interest.  The FINRA Dispute Resolution Process is designed resolve customers disputes with member firms concerning investment losses that are the result of sales practice violations.

Klayman & Toskes, P.A. is dedicated to the protection of BlackGold Opportunity Fund investor rights concerning investment advisory firm violations of securities industry rules and regulations.

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