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Central Coast investors lose millions in hedge fund deal

11/1/2007

KSBY 6 Action News

Central Coast investors who lost thousands of dollars want their money back.

Here are the Facts First:

  • A nationwide broker dealer called “Associated Securities” is being sued by 30 San Luis Obispo investors who lost money in a hedge fund.
  • Investors say they were assured by an advisor their money was safe.
  • The minimum amount they could invest was $250,000. Collectively, investors lost $5 million in the deal.

Some clients say they lost their life savings in the deal.

“This was money that I’ve worked for my entire life, every job that I’ve ever worked I put this money away. I earned it. I earned this money over a lot of years and for it to all just be gone in one day,” said an anonymous investor.

It is an investors worst nightmare, their money gone.

That’s what clients say happened to thousands of dollars they invested in “Apex” hedge fund sold to them by a representative from Wealth Wise LLC. in San Luis Obispo.

Customers have filed suit against Associated Securities, a broker dealer and the advisor who recommended they put their money in a hedge fund.

“These people invested in a fund that carried an above market return and anything that carries an above market return carries additional risks,” said Erwin Schustak.

The attorney representing 30 San Luis Obispo County investors who lost big bucks says his clients were hoodwinked.

“Apex was sold as a investment where the principal would be protected and had complete liquidity and that’s untrue,” said Philip Aidikoff. “The principal was never protected. it was a very speculative hedge fund that blew up.”

Investors are looking for anyway to get back what they lost.

“That day and the effects of it will be with me for the rest of my life. No doubt about it,” said the investor.

Many of the clients are reluctant to come forward because they are embarrassed about loosing their money this way.

More investors are expected to file claims against Associated Securities.


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