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GenSpring in the Hot-Seat for Hedge Funds Sold as Conservative Bond Alternatives

The Law Offices of Robert Wayne Pearce, P.A. is currently investigating GenSpring Family Offices (formerly Asset Management Advisors (AMA)), a large wealth management firm that serves high net worth individuals and families, for selling hedge funds to investors as an alternative to bond or fixed income investments. Some of the hedge funds that were sold were "funds of funds" with layers of managers and mixed investment strategies. Some Investor portfolios have lost up to 24 percent of their value between September 2008 and December 2008 - more than two times the amount of downside protection promised by GenSpring to its clients. This comes as no surprise given the amount of misrepresentation and lack of disclosure issues related to high risk investments that investors have been facing recently.

Hedge funds are similar to mutual funds in structure. Investor money is pooled together and invested in an effort to make a positive return. However, hedge funds have more flexible investment strategies than mutual funds. Hedge funds seek to profit in all kinds of markets by utilizing strategies involving leverage, short-selling, and other speculative investment practices that are not typically used by mutual funds. Another factor that distinguishes hedge funds from mutual funds is that hedge funds are not subject to the same regulations designed to protect investors. Depending on the amount of assets in the hedge funds advised by a manager, some hedge funds may not be required to file reports with the SEC. Fortunately, hedge funds are subject to the same prohibitions against fraud as are other market participants. In addition, managers owe a fiduciary duty to the funds under management.

GenSpring has more than $17 billion under management, and it currently caters to some of the wealthiest families in the world. It is a wholly-owned subsidiary of SunTrust and has offices in Florida, Minnesota, Tennessee, Colorado, California, Georgia, Maryland, Connecticut, North Carolina, Arizona, and New York.

Have you suffered losses resulting from an investment misrepresented by GenSpring Family Offices? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against stockbrokers who misrepresented and sold unsuitable investment to investors.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

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