Managing retail funds always risky?

D

denis.trdr

Is managing retail money inherently riskier from a legal perspective than managing qualified investor's money?

More importantly, does staying within the CTFC/NFA rules and passing the audits protect a manger when sued by disgruntled retail investors due to loses? (In other words, marketing rules were followed and disclosure documents were audited, etc.)

As I understand most HFs are structured as a limited partnership that shields the fund's and managers' assets from being vulnerable to a lawsuit by investors.

Do managed futures managers (CTAs) have the same or better protection. Does a manager who simply advises (through power of attorney) in a less vulnerable position than a hedge fund manager?
 
The LP protects the investors by limiting their liability to the funds invested. The manager of the fund is normally a General Partnership. None of this will stop an investor from suing you if you break the law or do business contrary to your Investment Management Agreement.
 
rmorse said:
The LP protects the investors by limiting their liability to the funds invested. The manager of the fund is normally a General Partnership. None of this will stop an investor from suing you if you break the law or do business contrary to your Investment Management Agreement.
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Assuming one does not break the law or the Management Agreement, what would the chances be that retail investors could successfully sue a manager/fund?

Any past precedent cases you could think of off hand?
 
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