Managed Futures Funds

Attorneys Protecting the Rights of Investors Nationwide

The term “managed futures fund” refers to an investment tool that trades futures contracts, or derivatives. This area can be obscure, even for seasoned investors. Managed futures funds were originally promoted by brokers as a way of diversifying and earning profits at a time when traditional investment methods were underperforming. More recently, however, their results have faltered, and some people have been burdened with steep fees that wipe out any gains they may have earned. Based in New York, Fitapelli Kurta is comprised of securities fraud lawyers dedicated to protecting investors from negligence and wrongdoing in areas such as managed futures funds. Our seasoned professionals have vast experience representing individuals who have been harmed by the actions of brokers.

Potential Problems with Managed Futures Funds

Generally, Commodities Trader Advisors (CTAs) are the professionals responsible for managing the assets in a futures fund. CTAs must register with the Commodity Futures Trading Commission (CFTC) and are required to provide certain disclosure documents and financial statements. They must also go through an FBI background check before they are allowed to manage the money of others. However, this industry is not highly regulated, and investors may be susceptible to fraud.

One of the most common issues that can arise is that managers or CTAs often make exorbitant fees or commissions on managed futures funds. This is ideal for them but can sometimes cost investors as much as or more than any profits earned. Since managers make such high fees on these types of funds, there is an incentive to keep the assets of their clients in them, even when they are not performing well. Moreover, people who run managed futures funds are not required by the Securities and Exchange Commission (SEC) to disclose their fees to investors, and they do not usually need to file annual reports with the SEC. The low level of oversight, coupled with the potential benefits to investment professionals, creates an environment in which securities fraud is particularly likely.

Some of the managed futures funds that may have potentially misrepresented fees to investors include those run by Morgan Stanley and Merrill Lynch as well as the Grant Park Futures Fund, the Campbell Strategic Allocation Fund, and the RJO Global Trust.

Hold Brokers Accountable for Stock Fraud

As with any claim for investment fraud, someone who has suffered losses with respect to a managed futures fund must show that a broker, manager, or CTA purposefully misrepresented, or omitted, an important fact on which the investor then relied to his or her detriment. This type of behavior can consist of misleading investors about the risks of a certain fund, or intentionally failing to discuss details related to fees or commissions.

Claims of investment fraud can be brought under state or federal laws. Often, these issues can be resolved through mediation or arbitration, but investors can also seek legal remedies through the courts. The securities attorneys at Fitapelli Kurta are highly experienced in representing their clients before FINRA, an independent regulatory organization designed to protect victims of fraud.

Since managed futures funds are a complicated area within the investment industry, investors may not fully comprehend the dangers and fees associated with using them. If you have placed your assets in one of these funds but were never informed of the risks, or your broker did not tell you about the potential costs, you may be entitled to legal recourse. It is vital to seek qualified legal representation as soon as possible to preserve your claim before your right to sue expires.

Skilled Legal Guidance for Victims of Investment Fraud

If you or someone you know has invested in any of these managed futures funds, and has received misleading information regarding market performance or fees, you should not hesitate to seek knowledgeable legal counsel. Victims of investment fraud can consult the securities attorneys at Fitapelli Kurta for a free case evaluation. From our offices in New York, we assist investors throughout the United States in asserting their rights. Call (877) 238-4175 or contact us through our website today.