SAN DIEGO, March 15, 2012 /PRNewswire/ -- In 2009, Plaintiffs filed suit against KKBS's clients and four other Defendants seeking millions of dollars in damages and other relief. Plaintiffs alleged that they invested six million dollars in a municipal bond arbitrage hedge fund in 2007. They claimed that the Defendants, investment advisers, made a joint investment management presentation in which Defendants recommended that Plaintiffs invest in the hedge fund. By the end of 2008, the hedge fund had collapsed in the wake of the recent global financial crisis.
Plaintiffs claimed losses of $4.8 million and sought prejudgment interest and punitive damages. Plaintiffs asserted that Defendants breached their fiduciary duties by recommending the hedge fund investment and by failing to properly explain the risks of investing. Plaintiffs further alleged fraud based upon their contention that Defendants lied to them about the risks of investing in the hedge fund, including the its use of up to ten times leverage. Plaintiffs claimed that Defendants intentionally concealed from them important information about the hedge fund.
KKBS represented two of the six defendants, a municipal bond investment adviser and its Chief Executive Officer. KKBS's clients asserted that they did nothing wrong and were not involved in recommending or managing the hedge fund. In December of 2011, following a 25 day jury trial and 4 days of deliberations, the jury found that KKBS's clients did not engage in any fraudulent or negligent conduct, returning a unanimous verdict in their favor. The other Defendants, represented by separate counsel, were found liable.
About the firm:
Krause, Kalfayan, Benink & Slavens, LLP is a boutique financial and business litigation firm representing both plaintiffs and defendants in complex financial, business and securities matters. Contact: Vincent D. Slavens, Esq., 550 West C Street, Suite 530, San Diego, California, 92101; Tel: (619) 232-0331; Fax (619) 232-4019; [email protected]; www.kkbs-law.com.
SOURCE Krause, Kalfayan, Benink & Slavens, LLP