NEW YORK, NY / ACCESSWIRE / June 19, 2017 / Bronstein, Gewirtz & Grossman, LLC notifies investors that a class action lawsuit has been filed against Catalyst Hedged Futures Strategy Fund Class A, Class C and Class I (“Catalyst Futures Fund” or the “Company”) (NASDAQ: HFXAX; NASDAQ: HFXCX; NASDAQ: HFXIX) securities and certain of its officers, on behalf of a class who purchased Catalyst Futures Fund securities between November 1, 2014 and April 28, 2017 (the “Class Period”). Such investors are encouraged to join this case by visiting the firm’s site: www.bgandg.com/hfxax.
This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1933.
The complaint alleges that Catalyst Futures Fund was recognized as a mutual fund, defendants marketed and sold shares of the Fund as low-risk, low-volatility investment with minimal correlation to the U.S. equity market. The Prospectuses for the Fund stated that the Fund “places a strong focus on risk management that is intended to provide consistency of returns and to mitigate the extent of losses … [T]he Fund employs strict risk management procedures to adjust portfolio exposure as necessitated by the changing market conditions.” The complaint alleges that these statements and other like them in the Fund’s Prospectuses and Registration Statements issued in connection with the offerings of Fund shares were inaccurate statements of material fact because they did not disclose that the Catalyst Futures Fund continued to invest as if it were a hedge fund, taking massive directional bets against U.S. stock market indices through complex derivative instruments, thereby exposing investors to the heightened risk of loss capital.
Subsequently, in February 2017, the Catalyst Futures Fund dropped in the net asset value (“NAV”) of Fund shares, losing $600 million over a few days’ time. Between February 2 and February 15, 2017, the NAV for the Fund’s Class A shares dropped over 15%, from $10.59 per share to $8.98. Numerous news sources started reporting on the erosion in Fund value, describing the loss as a “melt-down” and saying that the Fund was “blowing up.” According to the complaint, Catalyst Futures Fund had taken out substantial option contracts that effectively “shorted” the S&P 500, consequently the Fund had made a directional bet that the general equity market would not rise significantly in value. As the market rallied around the time these options were set to expire in mid-February 2017, the Fund experienced rapidly accelerating losses, as it had little time for the market to reverse itself and for the bet to return to profitability. As these undisclosed risks occurred, investors suffered hundreds of millions of dollars in losses, with the value of Fund assets dropping over $1 billion since early 2017. Between February 2, 2017 and March 15, 2017, the NAV of the Fund’s Class A shares, Class C shares, and Class I shares has dropped roughly 21%, or $2.22 per share, $2.16 per share and $2.23 per share, respectively.
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm’s site: www.bgandg.com/hfxax, or you may contact Peretz Bronstein, Esq. or his Investor Relations Analyst, Yael Hurwitz of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss in Catalyst Futures Fund, you have until June 27, 2017 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as a lead plaintiff.
Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique. Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients. In addition to representing institutions and other investor plaintiffs in class action security litigation, the firm’s expertise includes general corporate and commercial litigation, as well as securities arbitration. Attorney advertising. Prior results do not guarantee similar outcomes.
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Yael Hurwitz
212-697-6484 | [email protected]
SOURCE: Bronstein, Gewirtz & Grossman, LLC