If you suffered losses investing in Prestige Wealth Management Fund, the securities attorneys of The White Law Group may be able to help you recover your investment losses.
According to a press release, the Securities and Exchange Commission (SEC) recently accused the owners of a Buffalo area investment advisory firm of making false and misleading statements to clients. Timothy S. Demski and Walter F. Grenda are accused of recommending that their clients at Reliance Financial Advisers invest in a risky hedge fund that suffered substantial losses.
The SEC alleges that Demski and Grenda knew that the hedge fund manager, Scott Stephan, had very little hedge fund investing experience. In fact, the SEC alleged the two advisors distributed offering materials that greatly exaggerated Stephan’s experience in the securities industry.
The clients of Demski and Grenda – many who were retired or nearing retirement- invested approximately $12 million in the Prestige Wealth Management Fund. The Fund began trading in April 2011 and did not generate the returns investors were expecting. In October 2012, Grenada allegedly withdrew his clients from the fund before it collapsed a few months later. Unfortunately, Demski’s clients reportedly lost the vast majority of their investment – nearly $4 million.
Hedge funds employ various complicated trading schemes in an effort to maximize returns. These trading schemes involve risks which causes hedge fund returns to be extremely volatile. As such, they are better suited for experienced and accredited investors who can afford to risk total loss of their investment.
Although Demski and Grenda operated their own investment advisory firm, they were both registered brokers with another company. According to FINRA BrokerCheck, both men worked for Wall Street Financial Group from 10/2006 to 03/2011, before moving to the brokerage firm Mid Atlantic Capital Corporation in September 2011.
Brokerage firms have a legal responsibility to adequately supervise the investment transactions of their registered brokers. When a broker recommends investment products outside the scope of the firm, the act can be considered “selling away.” If a broker “sells away,” the brokerage firm may still be liable for negligent supervision and responsible for investment losses.
If you invested in Prestige Wealth Management Fund and would like to discuss your litigation options, please call the securities attorneys of 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 Vero Beach, Florida.
To learn more about The White Law Group, please visit www.WhiteSecuritiesLaw.com.