Investors in the fund are based in, among other places, Chicago, Aspen and South Florida

A Boca Raton investor has filed a federal class action lawsuit against a Chicago-based investment advisor that manages the LJM Preservation and Growth Fund, intended to “preserve capital, particularly in down markets (including major drawdowns)” -- only to lose 80% of its value last week.

Leonard Sokolow acquired shares of LJMIX pursuant to its misleading Registration Statements and Prospectuses. In the end, Sokolow and other investors lost hundreds of millions of dollars.

The lawsuit names as defendants LJM Partners and its Founder and Chairman Anthony Caine and Chief Portfolio Manager Anish Parvataneni, as well as others. It was filed in U.S. District Court for the Northern District of Illinois and claims violations of the U.S. Securities Act of 1933.

“Mr. Sokolow and the Class purchased shares of a fund that was marketed as a conservative investment, however, in reality, this was not the case as evidenced by the catastrophic losses suffered within a span of two days,” said Michael E. Criden from the law firm of Criden & Love in Miami, attorney for the plaintiffs, along with Tom Laughlin of Scott + Scott.

In truth, “the fund was not focused on capital preservation and left investors exposed to an unacceptably high risk of catastrophic losses,” the lawsuit claims. “That became clear on February 5, 2018, when the S&P fell approximately 4.6%. In the wake of this drop, LJMIX plunged from $9.82 on February 2, to $1.94 on February 7, a loss of some 80%.”