A Developing Risk For Private Investment Fund Sponsors

Law360, New York (September 28, 2012, 2:14 PM EDT) -- Virtually unheard of five years ago, securities class actions against private investment fund sponsors are now a growing risk. This development is the result of a combination of factors, including:

a challenging economic and investment environment; disappointing returns at some funds; the Madoff fraud; the efforts of the plaintiffs’ securities class action bar to cultivate relationships with certain institutional investors; and increased regulation of the private funds industry.

Despite these factors, the plaintiffs’ securities class action bar still faces substantial challenges in pursuing private investment funds....
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