BOCA RATON, Fla.--(BUSINESS WIRE)--Klayman & Toskes, P.A., www.nasd-law.com, has commenced an investigation into potential Financial Industry Regulatory Authority (FINRA) violations by Credit Suisse Securities (USA), LLC (“Credit Suisse”). The potential violations are based on the requirement that member firms perform appropriate due diligence to understand the risks of the LJM Preservation and Growth Fund (“LJM Fund”) and in its recommendations to clients to purchase the LJM Fund. There are three different classes of shares of the LJM Fund (“LJMAX,” “LJMCX,” and “LJMIX”). The LJMIX had been trading as high as $10.82 on the first trading day of 2018, but now trades at $1.99.
The LJM Fund, according to its prospectus, “seeks capital appreciation and capital preservation with low correlation to the broader U.S. equity market.” The strategy of the LJM Fund however, involved the buying and selling of put and call options. The fund was betting on a lack of volatility in the market, and for any such volatility, the LJM Funds would suffer significant losses. Brokers, including Credit Suisse, are required to understand the risk of the trading strategy. Credit Suisse was required to do their due diligence before selling any securities to its clients. They were required to determine whether the LJM Fund was a suitable investment for any customer, and only then could they recommend to customers with the appropriate risk tolerance.
The sole purpose of this release is to investigate whether Credit Suisse performed its due diligence prior to making recommendations to its clients to buy the LJM Fund. Current and former clients who have information about the sales practices of Credit Suisse are encouraged to contact Lawrence L. Klayman, Esq. of Klayman & Toskes, P.A. 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.