New York Securities Fraud Lawyers Blog
Various news sources, including the New York Post, the Wall Street Journal and CNBC reported on January 22, 2015 that Owen Li, the manager of Canarsie Capital, published a letter to investors apologizing for the almost complete loss of money, stating he was “truly sorry.”
According to the Wall Street Journal, Canarsie, which was started at the beginning of 2013 and named for the Brooklyn neighborhood where Mr. Li grew up, had approximately $60 million at the beginning of this year, not including leverage. With borrowed money, the fund had approximately $98 million at the beginning of 2014, according to the Wall Street Journal.
According to the CNBC article, Mr. Li previously worked as a trader for Galleon Group, which collapsed amid allegations of insider trading, and the 2011 conviction and imprisonment of Raj Rajaratnam, Galleon’s founder.
The Wall Street Journal’s article detailed that in March 2014, its prime broker, Morgan Stanley, stated it was uncomfortable with the firm’s risk practices, and a month later told Canarsie to find a new clearing firm concerning the continuing risk profile.
While hedge funds may experience large swings in profit or losses, it is essential that the marketing and subscription documents investors are shown accurately reflect the risks that will be applied to the invested funds. In certain circumstances, investments may be misrepresented when marketers describe the investment as not being as risky as it truly is.
If you believe you may have suffered monetary losses as a result of investments that were not properly marketed or held outsized undisclosed risk, please contact the attorneys at Malecki Law to determine if you have a claim for damages.