October 16, 2013 Comments (0) Blog, Securities Fraud

Recovery of Investment Losses in Managed-Future Funds

(Last Updated On: July 17, 2015)

Have you suffered significant financial losses in the managed-future fund, Morgan Stanley Spectrum Technical LP ? If so, the White Law Group may be able to help you recover your losses.

Managed futures are a type of alternative investment that invest primarily in the futures market and other derivative securities.  Managed futures take long and short positions in futures contracts, they focus largely on equity indexes, interest rates, and currency. These funds are managed by commodity-trading advisers (CTA) and are regulated  by the Commodity Futures Trading Commission (CFTC) and the National Futures Association.

One advantage of managed futures is their potential to earn a profit in any type of economic environment. Unfortunately for investors, these profits often never make it into the pockets of the investors.

According to Investment News, the managed future fund, Morgan Stanley Spectrum Technical LP, raised more than $790 million in the decade ended in 2012. During that time the fund made a profit of $490 million, yet investors ended up losing money. It appears that the fund spent $498.7 million on commissions, expenses and managers fees.

Unfortunately for many investors they were unaware of the exorbitant fees that would be charged or the possibility that high fees that could completely wipe out any profits.  Managed futures fees typically range between 7% to 9% of assets invested, in addition to 20% of any profits. Brokers that sell managed futures can also earn up to 4% of assets invested.

The Investment News article also stated that, according to data filed with the US Securities and Exchange Commission and compiled by Bloomberg, 89% of the 11.51 billion of gains in 63 managed-futures funds went to fees, commissions and expenses during the decade form Jan1, 2003 to Dec. 31, 2012.

The Morgan Stanley Spectrum Technical fund prospectus was pitched to investors as a way to  diversify their portfolio and potentially earn profits when traditional markets were down.

It appears that many brokers, blinded by the high commissions, failed to perform adequate due diligence on the fund and either did not fully understand the extent of these profit eating fees or recommended that their clients invest anyway.  To the extent that some brokers or brokerage firms recommended the Morgan Stanley Spectrum Technical fund inappropriately, they can be liable for investment losses or the recoupment of the fees paid.

The White Law Group is investigating potential claims against broker dealers that sold managed-future funds like the Morgan Stanley Spectrum Technical fund.  The investigation also includes investments in the Managed futures Premier BHM Fund, Morgan Stanley Smith Barney Spectrum Strategic Fund, grant Park Futurs Fund LP, Systematic Momentum Futures Access,  RJO Global Trust and Altegris Winton Futures Fund.

If you invested in Morgan Stanley Spectrum Technical LP or another managed-futures fund and would like to discuss your litigation options, please call The White Law Group, at (312) 238-9650 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, Please visit www.WhiteSecuritesLaw.com

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