Securities arbitration lawyer Jake Zamansky, at law firm Zamanksy and Associates, which is leading the case, alleges that investors were told that 7% of the fund was invested in sub-prime. However, there are indications that the proportion was more than 50%. The complaint also alleges that Bear Stearns misrepresented the risk controls in place.
“The funds were pitched as conservative investments,” says Zamansky. “Investors were told that the funds were 90% triple-A and double-A rated, and that downside losses could only reach 10%, not zero.
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