If you are an investor that suffered financial losses from investing in either the Triloma EIG Energy Income Fund – Term 1 or the Triloma EIG Energy Income Fund, you may have grounds for a securities fraud claim to try to recoup your money. At Shepherd Smith Edwards and Kantas, LTD LLP we have been speaking with Triloma Fund investors to help them explore their legal options. Contact our investor fraud law firm today to request your free case consultation.
According to their website, the Triloma Funds are unlisted investment companies that have mostly an international portfolio of “privately originated energy company and project debt.” Investors included individual investors and institutional investors.
However, late last month, the Triloma Funds’ Board of Trustees approved a liquidation plan for each of the funds, so as to facilitate their dissolution. The Funds will refrain from any business activities besides those having to do with shutting down operations. Meantime, monthly distributions and reinvestment plans for both funds have ended. An initial cash distribution related to liquidation is scheduled, as is a second one.
Triloma Funds Are Not Suitable for Every Investor
Unfortunately, there are investors that backed the Triloma Funds and did so because the investments were inappropriately recommended to them by a financial advisor. They may have suffered significant losses as a result.
The Triloma Funds came with risks and costs involved that may not have been clearly articulated or represented to some investors. For example, energy sector investment vehicles, such as the Triloma Funds, are usually complex investments that charge substantial commissions and fees to both the broker soliciting the investment and the fund sponsor. These types of investments are typically illiquid.
Also, as noted on the Triloma Funds’ website, some of the risks involved in the Triloma EIG Energy Income Fund – Term 1 are: participation in the energy sector (including exposure to adverse occurrences, construction risks, and investment risks) and the oil and gas arena, different kinds of debt securities that come with their own volatility risks, economic downturns impacting instruments that are already below investment grade, non-US investment risks (because of where the Funds invest), as well as legal and regulatory risks. The Triloma EIG Energy Income Fund notes a similarly extensive list of risks to its investors.
That’s why a broker and his/her broker dealer have a duty to make sure that the investment is appropriate not just for the investor’s portfolio, but also for his/her goals and the degree of risk that can be handled. Otherwise, substantial losses may lead to devastating financial consequences for the investor. This goes for ordinary retail investors, high net worth individual investors, and institutional investors.
It is also important that a broker not just apprise an investor of the risks involved, but also, that he/she works to ensure that an investor understands what these risks, as well as other details of an investment, mean. This way, an investor can make an informed decision before getting involved.
Contact our Triloma Fund Fraud Attorneys so that we can help you determine whether you have grounds for a FINRA arbitration claim.
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