NEW YORK--(BUSINESS WIRE)--Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in Catalyst Hedged Futures Strategy Fund (“Catalyst Futures Fund” or the “Fund”) (MUTF:HFXAX; MUTF:HFXCX; MUTF:HFXIX) of the June 27, 2017 deadline to seek the role of lead plaintiff in a federal securities class action.
If you invested in the Fund’s Class A, C or I shares between November 1, 2014 and April 28, 2017 and would like to discuss your legal rights, click here: www.faruqilaw.com/catalyst. There is no cost or obligation to you.
You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to rgonnello@faruqilaw.com.
The lawsuit has been filed in the U.S. District Court for the Eastern District of New York on behalf of all those who purchased Class A, Class C and Class I shares of the Catalyst Futures Fund between November 1, 2014 and April 28, 2017 (the “Class Period”). The case, Emerson et al v. Mutual Fund Series Trust et al, No. 2:17-cv-02565 was filed on April 28, 2017.
The lawsuit focuses on whether the Fund and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose material information about the Fund. The Fund stated, among other things, in its Prospectuses, that the Fund’s objective is “capital appreciation and capital preservation in all market conditions, with low volatility and low correlation to the US equity market.” However, the lawsuit claims that this statement and others like them were inaccurate because they did not disclose that the Fund continued to invest as if it were a hedge fund, taking massive bets against U.S. stock market indexes through complex derivative instruments. As a result, investors were exposed to a heightened risk of loss of capital.
Specifically, in February 2017, the Fund experienced a sudden, dramatic drop in the net asset value of Fund shares. Additionally, several media organizations reported on the loss in Fund value, by characterizing the loss as a “meltdown” and stating that the Fund was “blowing up.” According to the lawsuit, it was revealed that the Fund had effectively “shorted” the S&P 500, meaning that the Fund had made a directional bet that the general equity market would not rise significantly in value. However, as the market rallied around the time these options were set to expire, the Fund experienced accelerating losses, as it had little time for the market to reverse itself and for the bet to return to profitability.
As a result of these undisclosed risks materializing, investors suffered hundreds of millions of dollars in losses.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Catalyst Futures Fund’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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