SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/ljmfunds/) today announced that a class action has been commenced on behalf of purchasers of shares of the LJM Preservation and Growth Fund (MUTF: LJMAX, LJMCX, LJMIX) during the period between February 28, 2015 and February 7, 2018 (the “Class Period”). This action was filed in the Northern District of Illinois and is captioned Nosewicz v. LJM Funds Management, Ltd., et al., No. 18-cv-1589.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from February 9, 2018. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/ljmfunds/. 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.
The complaint charges LJM Funds Management, Ltd. (“LJM Funds”), certain of its officers, Two Roads Shared Trust (the “Trust”), the registrant for the offering of LJM Preservation and Growth Fund (the “Preservation Fund” or “Fund”) shares, and its Trustees, and Northern Lights Distributors, LLC, the underwriter and distributor for the shares, with violations of the Securities Act of 1933. LJM Funds is the investment advisor to the Preservation Fund, a mutual fund that was marketed to investors seeking lower risk and moderate growth through a more conservative volatility trading strategy that would preserve capital and avoid the massive risks of aggressive hedge funds seeking greater returns.
The complaint alleges that defendants made false and misleading statements and/or failed to disclose material information in the Registration Statements and Prospectuses (the “Offering Materials”) issued in connection with the sale of Preservation Fund shares to investors. Specifically, contrary to defendants’ statements in the Offering Materials, including that the objective of the Fund was to “seek capital appreciation and capital preservation with low correlation to the broader U.S. equity market” and to “preserve capital, particularly in down markets (including major market drawdowns),” the Fund was not focused on capital preservation and was overexposed to the risk of volatility and a down market, as was demonstrated when the value of Preservation Fund shares fell approximately 80% in just two days as markets dropped and volatility spiked. While the Fund purportedly sought to preserve capital and obtain growth by betting against market volatility, the Fund actually made massive and unmitigated bets that would expose investors to excessive risks and catastrophic losses of capital, even in a moderate down market of less than 5%. As a result of defendants’ false statements and/or omissions in the Offering Materials, the net asset value (“NAV”) of Preservation Fund shares was artificially inflated to as high as $11.47 per share during the Class Period.
On Monday, February 5, 2018, while the Dow fell approximately 4.6% and the S&P fell 4.1%, the NAV of Preservation Fund shares plunged 56%, from $9.67 per share to $4.27 per share. Then on February 6, 2018, the Dow and S&P increased by approximately 2% while the NAV of Preservation Fund shares fell again, to $1.91 per share. Thus, while the Dow and S&P suffered a modest downturn of just 2% over two days, the Fund suffered a cumulative loss of approximately 80% of its value, erasing more than $600 million in just two days.
On February 7, 2018, the Fund filed a notice with the SEC stating that it was “closed to all new investments.” On February 9, 2018, LJM Funds sent a letter to Preservation Fund shareholders stating that the Fund had been forced to close its open positions, causing “additional substantial losses from Monday’s closing prices.” In an SEC filing dated February 27, 2018, LJM Funds and the Trust announced that they had decided to liquidate and dissolve the Fund.
Plaintiff seeks to recover damages on behalf of all purchasers of shares of the Fund during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is widely recognized as a leading law firm advising and representing U.S. and international investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For the third consecutive year, the Firm ranked first in both the total amount recovered for investors and the number of shareholder class action recoveries in ISS's SCAS Top 50 Report. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm’s clients. Robbins Geller not only secures recoveries for defrauded investors, it also implements significant corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.