In early 2010, a large global bank was compelled to enter JAMS arbitration with a high net worth client, which invested in a hedge fund that froze redemptions.  The Plaintiff alleged that the bank  failed to perform adequate due diligence on the hedge fund , and that the multi-strategy fund, which invested in illiquid assets including real estate, credit derivatives and provided short term corporate financing, was an unsuitable investment for the Plaintiff.

The legal counsel for the bank, a large Chicago law firm, engaged a team from SFC Associates to analyze the strategy employed by the fund; the due diligence performed by the bank prior to and during the investment by the Plaintiff; and the suitability of the hedge fund within the context of the Plaintiff’s entire portfolio.

SFC Associates President Ezra Zask provided deposition testimony, including a narrated presentation charting the unpredictable nature of global credit markets in 2007-2009, and its effect on the fund’s strategy.  The JAMS arbitrator ruled in favor of the Defendant.