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1861 Capital Management Funds: Investor Losses

Maddox Hargett & Caruso, P.C. currently is investigating investor losses related to the 1861 Capital Management Funds and allegations that the funds were marketed and sold by UBS and various broker/dealers as safe, secure, and low-risk when in reality they were highly leveraged municipal arbitrage funds.

The 1861 Capital Management Funds focused on municipal arbitrage, which attempts to take advantage of the differences between municipal bonds and other types of debt, including Treasury securities and corporate bonds. Municipal arbitrage funds like the 1861 Funds also can be highly leveraged. That leverage, in turn, creates added risk for the investor and the potential for extreme financial losses.

It is believed that UBS and other broker/dealers sold the following 1861 arbitrage funds: 1861 Capital Municipal Enterprise Domestic Fund, LP, 1861 Capital Municipal Enterprise Offshore Fund, Ltd., 1861 Capital Discovery Domestic Fund, LP, and 1861 Capital Discovery Offshore Fund, Ltd.

The funds themselves were targeted to individual investors, many of whom were elderly and retirees and who took a conservative approach to investing. Many of these investors were looking for low-risk investments that provided safety and security.

What they got, however, was something entirely different. The investing strategies behind the 1861 Funds were highly risky, exposing investors to 100% or more to a loss of their principal investment.

If you’ve suffered financial losses from the 1861 Capital Management Municipal Bond Arbitrage Funds, contact us to tell your story.

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