On February 9, 2018, Plaintiff's law firm filed a press release announcing the class action lawsuit. According to the press release, LJMIX is a mutual fund that purports to invest primarily in purchased and sold call and put options on Standard & Poor’s 500 Futures Index (“S&P”).
The complaint alleges that Defendants violated provisions of the Securities Act by issuing false and misleading statements to investors, including in filings with the U.S. Securities and Exchange Commission (“SEC”). Specifically, Defendants made false and/or misleading statements and/or failed to disclose that LJMIX was not focused on capital preservation and left investors exposed to an unacceptably high risk of catastrophic losses. In addition, it is alleged that Defendants violated 17 C.F.R. 229.303 by failing to disclose the fact that LJMIX had not taken appropriate steps to preserve capital in down markets.
The truth emerged on February 5, 2018, when the S&P fell approximately 4.6 percent. In the wake of this drop, LJMIX plunged from a close price of $9.82 on February 2, 2018 to a close price of $1.94 on February 7, 2018, a massive loss of approximately 80 percent.
On March 28, 2018, the Court issued an Order consolidating cases. On June 26, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed a consolidated Complaint on August 16.