Boca financial executive sues over collapse

Chicago fund management firm accused of misleading investors

A top executive of a Boca Raton financial services firm is leading a proposed class-action lawsuit that alleges he and other investors were deceived by a Chicago-based fund management firm that lost 80 percent of its value.

The LJM Preservation and Growth Fund, trading under the symbol LJMIX, failed to live up to its name, according to a suit filed in Chicago federal court. On Feb. 5, its share price plunged from $9.67 to $4.27, and a day later, slid again to $1.94, for a total decline of 80 percent.

The suit, brought on behalf of Leonard Sokolow, CEO and president of Newbridge Financial Inc., alleges LJM made “false and misleading” statements in its prospectuses to investors.

On its website, an LJM statement said: “The fund aims to preserve capital, particularly in down markets.” The suit asserts the opposite happened. “In truth, however, LJMIX was not focused on capital preservation and left investors exposed to an unacceptably high risk of catastrophic losses,” the suit alleges.

Sokolow saw a $90,000 investment dwindle to $18,000, the suit says. His investments were in options, which are contracts that give investors the right to buy or sell underlying stock at a set price over a predetermined time period.

Miami attorney Michael Criden, who represents Sokolow, said Newbridge is not involved in the suit. He said the financial loss claim involves Sokolow’s money alone.

Criden added that he thinks “there is a fairly large number of South Florida investors” who lost $4 million to $5 million. “It’s probably 50 to 100 investors in the tricounty area,” he said.

The fund management