Famed divorce attorney Raoul Felder is suing AllianceBernstein for $5 million in Manhattan Supreme Court after it allegedly gambled $200,000 of his money with a risky hedge-fund investment and lost.
The suit allegedly claims that in a meeting with an Alliance agent in January 2007, Felder "made it clear that he earns substantial and sufficient, for him, sums of money, and that as far as the money entrusted to defendants, his stated goal was the preservation of capital."
Felder eventually relented and, based on the firm’s assurances, invested $750,000.
After initially being told the fund "was doing great," he soon discovered it was worthless and that the firm raked in commissions.
The suit said firm bigwigs "tried to minimize his concerns" by noting $750,000 "represented only a minor portion" of his portfolio.
"They said, ‘What does it matter to you? You have a lot of money. So what?’ " Felder said. Felder said he wound up losing $200,000.
The suit charges the firm with fraud and is seeking the $5 million as punitive damages.
Yet another example of many similar cases to come involving hedge funds. Our firm represents several clients who were recommended similar funds. If you were recommended a worthless hedge fund, please call Vincent Imbesi.