- July 22, 2021
- Investor Education
Hedge funds can be a great investment opportunity for certain investors. But they are also quite risky. And if you can’t afford to absorb that risk, you shouldn’t be investing in hedge funds. Unfortunately, many financial advisors and stockbrokers fail to take their investors’ priorities into account and will recommend investment in hedge funds to unsuitable investors.
In cases like these, you may be able to recover your investment losses and hold your broker accountable for their negligence or misconduct. Below, we go into further detail about what hedge funds are. Call an investment loss lawyer today and ask how you could get your money back.
What Are Hedge Funds?
Hedge funds are a type of alternative investment. They pool together the funds of many investors in order to increase their buying power. There are many different strategies that hedge funds can use to generate returns for investors. And since they are not as regulated by the U.S. Securities and Exchange Commission, they can invest in virtually anything.
But hedge funds are also only open to accredited investors. These are investors who earn an annual income of more than $200,000, or those who have a net worth of more than $1 million. They also typically require a substantial initial minimum investment that you won’t be able to touch for at least one year. Even then, you can only make withdrawals at specific times, such as quarterly or bi-annually.
How You Could Recover Losses After Investing in Hedge Funds
The fact that hedge funds are initially illiquid, their frequent use of concentrated funds as an investment strategy, and the use of leverage can make them a particularly risky investment option. And they are not suitable for all investors.
If you lost money after investing in hedge funds, you aren’t necessarily entitled to recover your losses. One of the best ways you can get your money back is by proving to the arbitrators with the Financial Industry Regulatory Authority (FINRA) that your broker or financial advisor is at fault for the losses you suffered.
Lack of portfolio diversification, unsuitability, and fraud are just a couple of ways your broker could have taken advantage of you and be responsible for your losses. Through FINRA arbitration, your lawyer can help you show the arbitrators that your financial advisor is at fault for your losses. If they agree, they can order the liable party to repay you in full.
Meet with an Investment Loss Recovery Lawyer
Investing in hedge funds comes with a significant risk. If you suffered losses and your stockbroker or financial advisor is at fault, you may be able to get your money back through arbitration. An experienced investment loss lawyer at Wolper Law Firm can help you get the compensation you’re entitled to.
When you’re ready to get started on your FINRA arbitration complaint, call our office at 800.931.8452. Or fill out our quick contact form and we will reach out to you to discuss the specific details of your case.