Ayala filed a lawsuit against GTA advisors and its owner (“Defendants”), alleging that Defendants were negligent in the management and investment of its client’s funds.
Ayala’s client main owner, Mr. Ubieto, was 75 years old at the time he started investing with the Defendants. Mr. Ubieto, from Guatemala, had a history of choosing extremely conservative investments, as part or most of the funds where retirement funds of the now deceased owner of the Denmark Properties Limited, the Plaintiff in the case.
As stated from the Complaint “Defendants began investing Plaintiff’s funds in highly complex investments known as leveraged and inverse exchange traded funds. Leveraged ETFs, sometimes labeled “ultra” or “2x,” seek to deliver multiples of the performance of the index that they track, typically on a daily basis. Some leveraged ETFs are inverse or short funds. An inverse ETF is designed to provide the opposite of the return of the underlying index it tracks, such as the S&P 500, and typically does so on a daily basis. Thus, in a leveraged inverse ETF, if the S&P goes down for the day, the ETF should go up in value. Leveraged and inverse ETFs are typically short-term investments. They are used to hedge a portfolio.” Complaint at ¶¶20-22.
As a standard in the industry, leveraged and inverse ETFs are designed to be held for less than a day or two weeks the most. Instead Defendants held the ETFs for 1,476 in some cases.
As stated by Attorney Eduardo A. Maura: “we are proud to help foreign investors seek redress from bad actors here in the United States, through our ever growing litigation practice. We look forward to seeking Justice for former Mr. Ubieto.”
A copy of the complaint can be found here: Complaint
For more information about our commercial litigation practice call 305-570-2208 or email Attorney Eduardo A. Maura at eayala@ayalalawpa.com
