SEC v. Edward S. Walczak

Edward S. Walczak allegedly misrepresented to investors how he managed risk in the Catalyst Hedged Futures Strategy Fund. According to the SEC, Walczak told investors that the Fund employed a risk management strategy involving safeguards to prevent losses of more than 8%, when in fact no such safeguards limited losses and Walczak did not otherwise consistently manage the Fund to an 8% loss threshold. The complaint further alleged that, between December 2016 and February 2017, the Fund breached certain risk parameters and Walczak failed to take the required corrective action. The fund lost more than $700 million.

Summary generated from official Securities and Exchange Commission press release