Erez Law is investigating David Lerner Associates brokers across the country who recommended their clients invest in Spirit of America Fund.
It is alleged that David Lerner Associates brokers recommended their clients invest in mutual funds that invested almost entirely in high-risk investments from the volatile energy sector, including the Spirit of America Energy Fund, one of three David Lerner proprietary funds.
The Spirit of America Energy Fund is a high-risk proprietary David Lerner Associates mutual fund that is concentrated almost entirely in investments from the volatile energy sector.
Although the Spirit of America Energy Fund’s prospectus states that it will invest at least 80% of its assets in energy sector investments, in reality, the fund invested more than 95% of its assets in investments from the volatile energy sector. The Spirit of America Energy Fund invested heavily in some of the most aggressive and riskiest types of energy sector investments, including exploration and production (E&P) master limited partnerships (MLPs). The client informed Isler that she was not comfortable investing in the Spirit of America Energy Fund.
It is alleged that brokers concentrated their client’s savings in a single high-risk proprietary mutual fund that invested almost entirely in highly correlated investments from the volatile energy sector. It is alleged that brokers did not disclose the enormous degree of risk, including sector concentration risk, associated with the speculative and unsuitable investment strategy employed in client’s accounts.
David Lerner Associates’ proprietary Spirit of America Energy Fund has lost approximately 90% of its value since late 2014, causing the client to suffer devastating losses to her retirement savings.
In late 2014, the energy sector experienced significant volatility after the price of oil dropped from over $100 per barrel to below $50 per barrel. Since late 2014, the energy industry has been in turmoil and many of the MLPs and other energy sector investments owned by the Spirit of America Energy Fund have filed for bankruptcy.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, David Lerner Associates may be liable for investment or other losses suffered by its customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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