Hope for Investors Who Lost Money in Tremont and Rye Select Funds

The media circus surrounding Bernie Madoff is finally winding down. The Justice Department is finishing up the trials against Madoff’s former management team. With Madoff serving life in prison, the public has relegated Madoff to the history books. Everyone has moved on… everyone except his victims. Thousands of investors will never forget the economic carnage cause by Madoff.

Two court appointed receivers have collected several billion dollars for victims, although Irving Picard, the bankruptcy trustee, is unwilling to share his recovery with folks who did not invest directly with Madoff or his company Bernard L Madoff Investment Securities. That’s bad news for folks who invested through the so-called feeder funds. These folks will likely get little from the government’s recovery efforts.

There is hope, however.

Investors who purchased feeder fund shares may be able to recover against the stockbrokers and financial professionals who sold and recommended these investments. To date we have represented many investors who lost money through various feeder funds including Anchor, Calhoun Market Neutral, PIWM, Maven and funds sold by Nikolai Battoo. This post addresses several such feeder funds affiliated with Tremont Partners. These funds include the Rye Select Broad Market Fund, Rye Select Broad Market Prime Fund, Rye Select Broad Market XL Fund, Tremont Market Neutral Fund II and Tremont Opportunity Fund.

Several investors have already filed lawsuits against Tremont. Those cases are still pending but haven’t done well to date. Even if they ultimately pay some money, not everyone will share and investors are unlikely to be made whole.

Is there any hope for these investors? Yes, if they purchased these funds through a stockbroker or other financial professional. Like the funds themselves, stockbrokers have an obligation to perform due diligence on the funds and investments they recommend to clients.

We believe that little, if any, due diligence was performed by the brokers or the funds themselves. Investors rely on their brokers to recommend suitable investments. When brokers are asleep at the switch and fail to properly investigate the funds they recommend, investors can often recover.

Loss claims against stockbrokers are generally handled by arbitration before the Financial Industry Regulatory Authority (FINRA). Most claims can be fully resolved within 14 months and without legal fees or costs unless there is a recovery..

Unfortunately, the time to file claims is quickly running out. Whatever you may collect later from the receivers or others does not preclude you from immediately filing claims against the broker or others selling these investments.

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