CAN I RECOVER MY 1861 CAPITAL (MUNICIPAL ARBITRAGE) FUND LOSSES?

The 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. were so-called municipal arbitrage bond funds created by 1861 Capital Management, LLC and sold by UBS to investors nationwide. It was called an "arbitrage" fund and many investors were misled into believing that it was relatively risk free, a safe or conservative investment fund. But it was nothing of the sort. It was a highly leveraged and speculative structured credit product that many believe to have been misrepresented and mismanaged.

The so-called municipal bond "arbitrage" strategy was a very complex investment strategy involving multiple investments in the tax exempt and taxable fixed income markets. The fund managers invested in long tax exempt municipal bonds and, in effect, shorted the equivalent of taxable corporate bonds utilizing libor swap contracts and swaptions. The key to the success of the strategy was "market timing" and the "continued correlation" of the tax exempt municipal bond yields and the libor swap contract yields. It was originally used by many banks as a short term trading strategy. But many firms like 1861 Capital converted it to a flawed long term buy and hold strategy to maximize their own sales commissions and management fees.

In August 2007, the handwriting was on the wall for the "muni-arbitrage" funds. It was time to sell not buy. It was not the time to launch new funds or increase the leverage of the funds. The "continued correlation" of the tax-exempt and taxable fixed income market yields had collapsed. The lack of correlation and the high leverage was a recipe for disaster. Nevertheless the "muni-arbitrage" fund managers proceeded with the investment strategy full steam in derogation of their fiduciary duties to investors.

UBS blamed the unforeseen and unprecedented market conditions as the reason for the collapse of the so-called "muni-arbitrage" funds in 2008. Nothing could be further from the truth, the funds were rocked in August 2007 and fund managers were put on clear notice of the dangerous market conditions and risk of loss. The real cause of the collapse was the fund managers' reckless disregard of the key factors of the strategy, "correlation" and "market timing," in relation to market conditions. As a result, many investors have commenced arbitration proceedings and recovered their losses due to misrepresentations and mismanagement of the so-called muni-arbitrage funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

CAN I RECOVER MY TW TAX ADVANTAGED FUND (MUNICIPAL ARBITRAGE) FUND LOSSES?

The TW Tax Advantaged Fund was a so-called municipal arbitrage bond fund created by First Republic Investment Management. It was called an "arbitrage" fund and many investors were misled into believing that it was relatively risk free, a safe or conservative investment fund. But it was nothing of the sort. It was a highly leveraged and speculative structured credit product that many believe to have been misrepresented and mismanaged.

The so-called municipal bond "arbitrage" strategy was a very complex investment strategy involving multiple investments in the tax exempt and taxable fixed income markets. The fund managers invested in long tax exempt municipal bonds and, in effect, shorted the equivalent of taxable corporate bonds utilizing libor swap contracts and swaptions. The key to the success of the strategy was "market timing" and the "continued correlation" of the tax exempt municipal bond yields and the libor swap contract yields. It was originally used by many banks as a short term trading strategy. But many firms like First Republic converted it to a flawed long term buy and hold strategy to maximize their own sales commissions and management fees.

In August 2007, the handwriting was on the wall for the "muni-arbitrage" funds. It was time to sell not buy. It was not the time to launch new funds or increase the leverage of the funds. The "continued correlation" of the tax-exempt and taxable fixed income market yields had collapsed. The lack of correlation and the high leverage was a recipe for disaster. Nevertheless the "muni-arbitrage" fund managers proceeded with the investment strategy full steam in derogation of their fiduciary duties to investors.

First Republic blamed the unforeseen and unprecedented market conditions as the reason for the collapse of the so-called "muni-arbitrage" funds in 2008. Nothing could be further from the truth, the funds were rocked in August 2007 and fund managers were put on clear notice of the dangerous market conditions and risk of loss. The real cause of the collapse was the fund managers' reckless disregard of the key factors of the strategy, "correlation" and "market timing," in relation to market conditions. As a result, many investors have commenced arbitration proceedings and recovered their losses due to misrepresentations and mismanagement of the so-called muni-arbitrage funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

CAN I RECOVER MY BELVEDERE ADVANTAGED (MUNICIPAL ARBITRAGE) FUND LOSSES?

The Belvedere Advantaged Muni Fund was a so-called municipal arbitrage bond fund created by GEM Capital, LLC. It was called an "arbitrage" fund and many investors were misled into believing that it was relatively risk free, a safe or conservative investment fund. But it was nothing of the sort. It was a highly leveraged and speculative structured credit product that many believe to have been misrepresented and mismanaged.

The so-called municipal bond "arbitrage" strategy was a very complex investment strategy involving multiple investments in the tax exempt and taxable fixed income markets. The fund managers invested in long tax exempt municipal bonds and, in effect, shorted the equivalent of taxable corporate bonds utilizing libor swap contracts and swaptions. The key to the success of the strategy was "market timing" and the "continued correlation" of the tax exempt municipal bond yields and the libor swap contract yields. It was originally used by many banks as a short term trading strategy. But many firms like GEM Capital converted it to a flawed long term buy and hold strategy to maximize their own sales commissions and management fees.

In August 2007, the handwriting was on the wall for the "muni-arbitrage" funds. It was time to sell not buy. It was not the time to launch new funds or increase the leverage of the funds. The "continued correlation" of the tax-exempt and taxable fixed income market yields had collapsed. The lack of correlation and the high leverage was a recipe for disaster. Nevertheless the "muni-arbitrage" fund managers proceeded with the investment strategy full steam in derogation of their fiduciary duties to investors.

GEM Capital blamed the unforeseen and unprecedented market conditions as the reason for the collapse of the so-called "muni-arbitrage" funds in 2008. Nothing could be further from the truth, the funds were rocked in August 2007 and fund managers were put on clear notice of the dangerous market conditions and risk of loss. The real cause of the collapse was the fund managers' reckless disregard of the key factors of the strategy, "correlation" and "market timing," in relation to market conditions. As a result, many investors have commenced arbitration proceedings and recovered their losses due to misrepresentations and mismanagement of the so-called muni-arbitrage funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

CAN I RECOVER MY ARAVALI FUND (MUNICIPAL ARBITRAGE) FUND LOSSES?

The Aravali Fund was a so-called municipal arbitrage bond fund created by Aravali Partners, LLC and sold by Alex Brown Deutsche Bank to investors nationwide. It was called an "arbitrage" fund and many investors were misled into believing that it was relatively risk free, a safe or conservative investment fund. But it was nothing of the sort. It was a highly leveraged and speculative structured credit product that many believe to have been misrepresented and mismanaged.

The so-called municipal bond "arbitrage" strategy was a very complex investment strategy involving multiple investments in the tax exempt and taxable fixed income markets. The fund managers invested in long tax exempt municipal bonds and, in effect, shorted the equivalent of taxable corporate bonds utilizing libor swap contracts and swaptions. The key to the success of the strategy was "market timing" and the "continued correlation" of the tax exempt municipal bond yields and the libor swap contract yields. It was originally used by many banks as a short term trading strategy. But many firms like Aravali Partners converted it to a flawed long term buy and hold strategy to maximize their own sales commissions and management fees.

In August 2007, the handwriting was on the wall for the "muni-arbitrage" funds. It was time to sell not buy. It was not the time to launch new funds or increase the leverage of the funds. The "continued correlation" of the tax-exempt and taxable fixed income market yields had collapsed. The lack of correlation and the high leverage was a recipe for disaster. Nevertheless the "muni-arbitrage" fund managers proceeded with the investment strategy full steam in derogation of their fiduciary duties to investors.

Alex Brown Deutsche Bank blamed the unforeseen and unprecedented market conditions as the reason for the collapse of the so-called "muni-arbitrage" funds in 2008. Nothing could be further from the truth, the funds were rocked in August 2007 and fund managers were put on clear notice of the dangerous market conditions and risk of loss. The real cause of the collapse was the fund managers' reckless disregard of the key factors of the strategy, "correlation" and "market timing," in relation to market conditions. As a result, many investors have commenced arbitration proceedings and recovered their losses due to misrepresentations and mismanagement of the so-called muni-arbitrage funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

CAN I RECOVER MY BLUE RIVER ADVANTAGED (MUNICIPAL ARBITRAGE) FUND LOSSES?

The Blue River Advantaged Muni Fund I was a so-called municipal arbitrage bond fund created by Blue River Asset Management. It was called an "arbitrage" fund and many investors were misled into believing that it was relatively risk free, a safe or conservative investment fund. But it was nothing of the sort. It was a highly leveraged and speculative structured credit product that many believe to have been misrepresented and mismanaged.

The so-called municipal bond "arbitrage" strategy was a very complex investment strategy involving multiple investments in the tax exempt and taxable fixed income markets. The fund managers invested in long tax exempt municipal bonds and, in effect, shorted the equivalent of taxable corporate bonds utilizing libor swap contracts and swaptions. The key to the success of the strategy was "market timing" and the "continued correlation" of the tax exempt municipal bond yields and the libor swap contract yields. It was originally used by many banks as a short term trading strategy. But many firms like Blue River converted it to a flawed long term buy and hold strategy to maximize their own sales commissions and management fees.

In August 2007, the handwriting was on the wall for the "muni-arbitrage" funds. It was time to sell not buy. It was not the time to launch new funds or increase the leverage of the funds. The "continued correlation" of the tax-exempt and taxable fixed income market yields had collapsed. The lack of correlation and the high leverage was a recipe for disaster. Nevertheless the "muni-arbitrage" fund managers proceeded with the investment strategy full steam in derogation of their fiduciary duties to investors.

Blue River blamed the unforeseen and unprecedented market conditions as the reason for the collapse of the so-called "muni-arbitrage" funds in 2008. Nothing could be further from the truth, the funds were rocked in August 2007 and fund managers were put on clear notice of the dangerous market conditions and risk of loss. The real cause of the collapse was the fund managers' reckless disregard of the key factors of the strategy, "correlation" and "market timing," in relation to market conditions. As a result, many investors have commenced arbitration proceedings and recovered their losses due to misrepresentations and mismanagement of the so-called muni-arbitrage funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

CAN I RECOVER MY ANCHOR CAPITAL (MUNICIPAL ARBITRAGE) FUND LOSSES?

The Anchor Capital Fund and Anchor Capital Fund II was a so-called municipal arbitrage bond fund created by Anchor Capital Group. It was called an "arbitrage" fund and many investors were misled into believing that it was relatively risk free, a safe or conservative investment fund. But it was nothing of the sort. It was a highly leveraged and speculative structured credit product that many believe to have been misrepresented and mismanaged.

The so-called municipal bond "arbitrage" strategy was a very complex investment strategy involving multiple investments in the tax exempt and taxable fixed income markets. The fund managers invested in long tax exempt municipal bonds and, in effect, shorted the equivalent of taxable corporate bonds utilizing libor swap contracts and swaptions. The key to the success of the strategy was "market timing" and the "continued correlation" of the tax exempt municipal bond yields and the libor swap contract yields. It was originally used by many banks as a short term trading strategy. But many firms like Anchor Capital converted it to a flawed long term buy and hold strategy to maximize their own sales commissions and management fees.

In August 2007, the handwriting was on the wall for the "muni-arbitrage" funds. It was time to sell not buy. It was not the time to launch new funds or increase the leverage of the funds. The "continued correlation" of the tax-exempt and taxable fixed income market yields had collapsed. The lack of correlation and the high leverage was a recipe for disaster. Nevertheless the "muni-arbitrage" fund managers proceeded with the investment strategy full steam in derogation of their fiduciary duties to investors.

Anchor Capital blamed the unforeseen and unprecedented market conditions as the reason for the collapse of the so-called "muni-arbitrage" funds in 2008. Nothing could be further from the truth, the funds were rocked in August 2007 and fund managers were put on clear notice of the dangerous market conditions and risk of loss. The real cause of the collapse was the fund managers' reckless disregard of the key factors of the strategy, "correlation" and "market timing," in relation to market conditions. As a result, many investors have commenced arbitration proceedings and recovered their losses due to misrepresentations and mismanagement of the so-called muni-arbitrage funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

CAN I RECOVER MY MAT (MUNICIPAL ARBITRAGE) FUND LOSSES?

The MAT funds were so-called municipal arbitrage bond funds created by Citigroup Alternative Investments and marketed by Smith Barney Financial Advisors to their best customers. It was called an "arbitrage" fund and many investors were misled into believing that it was relatively risk free, a safe or conservative investment fund. But it was nothing of the sort. It was a highly leveraged and speculative structured credit product that many believe to have been misrepresented and mismanaged.

The so-called municipal bond "arbitrage" strategy was a very complex investment strategy involving multiple investments in the tax exempt and taxable fixed income markets. The fund managers invested in long tax exempt municipal bonds and, in effect, shorted the equivalent of taxable corporate bonds utilizing libor swap contracts and swaptions. The key to the success of the strategy was "market timing" and the "continued correlation" of the tax exempt municipal bond yields and the libor swap contract yields. It was originally used by many banks as a short term trading strategy. But many firms like Citigroup converted it to a flawed long term buy and hold strategy to maximize their own sales commissions and management fees.

In August 2007, the handwriting was on the wall for the "muni-arbitrage" funds. It was time to sell not buy. It was not the time to launch new funds or increase the leverage of the funds. The "continued correlation" of the tax-exempt and taxable fixed income market yields had collapsed. The lack of correlation and the high leverage was a recipe for disaster. Nevertheless the "muni-arbitrage" fund managers proceeded with the investment strategy full steam in derogation of their fiduciary duties to investors.

Smith Barney blamed the unforeseen and unprecedented market conditions as the reason for the collapse of the so-called "muni-arbitrage" funds in 2008. Nothing could be further from the truth, the funds were rocked in August 2007 and fund managers were put on clear notice of the dangerous market conditions and risk of loss. The real cause of the collapse was the fund managers' reckless disregard of the key factors of the strategy, "correlation" and "market timing," in relation to market conditions. As a result, many investors have commenced arbitration proceedings and recovered their losses due to misrepresentations and mismanagement of the so-called muni-arbitrage funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

CAN I RECOVER MY ASTA (MUNICIPAL ARBITRAGE) FUND LOSSES?

The ASTA funds were so-called municipal arbitrage bond funds created by Citigroup Alternative Investments and marketed by Citibank Private Bankers to their best customers. It was called an "arbitrage" fund and many investors were misled into believing that it was relatively risk free, a safe or conservative investment fund. But it was nothing of the sort. It was a highly leveraged and speculative structured credit product that many believe to have been misrepresented and mismanaged.

The so-called municipal bond "arbitrage" strategy was a very complex investment strategy involving multiple investments in the tax exempt and taxable fixed income markets. The fund managers invested in long tax exempt municipal bonds and, in effect, shorted the equivalent of taxable corporate bonds utilizing libor swap contracts and swaptions. The key to the success of the strategy was "market timing" and the "continued correlation" of the tax exempt municipal bond yields and the libor swap contract yields. It was originally used by many banks as a short term trading strategy. But many firms like Citigroup converted it to a flawed long term buy and hold strategy to maximize their own sales commissions and management fees.

In August 2007, the handwriting was on the wall for the "muni-arbitrage" funds. It was time to sell not buy. It was not the time to launch new funds or increase the leverage of the funds. The "continued correlation" of the tax-exempt and taxable fixed income market yields had collapsed. The lack of correlation and the high leverage was a recipe for disaster. Nevertheless the "muni-arbitrage" fund managers proceeded with the investment strategy full steam in derogation of their fiduciary duties to investors.

Citibank blamed the unforeseen and unprecedented market conditions as the reason for the collapse of the so-called "muni-arbitrage" funds in 2008. Nothing could be further from the truth, the funds were rocked in August 2007 and fund managers were put on clear notice of the dangerous market conditions and risk of loss. The real cause of the collapse was the fund managers' reckless disregard of the key factors of the strategy, "correlation" and "market timing," in relation to market conditions. As a result, many investors have commenced arbitration proceedings and recovered their losses due to misrepresentations and mismanagement of the so-called muni-arbitrage funds.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

CITIGROUP FORCED TO PAY $85 MILLION TO MAT/ASTA INVESTORS--AND COUNTING!

USA Today recently published an article reporting that Citigroup has been forced to pay at least $85 million to investors in its disastrous MAT/ASTA municipal arbitrage hedge funds. ("Investor hedge fund claims costs Citigroup $85M and counting," by Kevin McCoy, USA Today). That amount does not include payments made by Citigroup to at least 39 other MAT/ASTA investors pursuant to confidential settlements, and Citigroup may well be forced to pay another $50 million or more as dozens more arbitrations go to hearings in 2012 and 2013, according to the article.

According to Robert Pearce of the Law Offices of Robert Wayne Pearce, P.A., "The USA Today article only reports the tip of the iceberg." This is because the article is apparently based on MAT and ASTA settlements and awards that have been reported. "Our law firm has filed MAT and/or ASTA claims for over 100 investors and many of those cases have gone unreported," according to Mr. Pearce.

The article notes that the Securities and Exchange Commission (SEC) has been investigating Citigroup's management and marketing of MAT/ASTA funds for almost 4 years. Former investors told USA Today that Citigroup financial advisors told them the funds would generate returns of 6% to 8%. "I certainly wasn't going to risk losing capital for a 6% to 8% return," said one investor who lost $700,000.

Despite the big awards, USA Today reports that many question why government regulators have not taken any regulatory action against Citigroup in connection with MAT/ASTA. "We've handed these cases to them on a silver platter," said Robert Pearce, whose Boca Raton, Florida law firm has handled several of the winning arbitrations. "I'm somewhat surprised," he added.

Citigroup did not target high rollers but sold the funds to ordinary municipal bond investors. One Citigroup internal email read: "Our goal is NOT to target hedge fund clients who are willing to accept an unrestricted risk profile, but larger traditional fixed-income investors who are seeking alternatives and customized solutions without materially altering their risk characteristics."

During the arbitrations, emails like the one above and other documents came to light that showed how Citigroup misled MAT/ASTA investors. For example, USA Today reports that Citigroup internal emails revealed that Citigroup gave MAT/ASTA funds the highest risk rating, but that their financial advisers said they had not been told that, and were thus unable to disclose it to their clients.

According to the article, Citi Private Bank director Arestoula Drakatos wrote in a March 11, 2008 email: "I am stunned at the complete arrogance and misinformation that we have been receiving. The most important point is that it is imperative that we do whatever it takes to make our clients whole."

Weeks later, according to USA Today, Sallie Krawcheck, who ran Citigroup's global wealth management division, warned the firm's board of directors "of a potential $1.5 billion financial hit for the company if it didn't move to keep angry investment clients from closing their accounts and financial advisers from departing." (Ms. Krawcheck left Citigroup in mid-2008 after a split with CEO Vikram Pandit, according to the article).

After considering the evidence, including damaging internal emails, "arbitrators have repeatedly sided with the angry investors," said USA Today.

The largest single award against Citigroup in a MAT/ASTA case so far is $54.1 million, which amount includes a large punitive damages award.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.