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Massachusetts Launches Investigation of Alt Fund Sales

Massachusetts Secretary of the Commonwealth William Gavin announced that he has launched an investigation of the sales of 25 alternative mutual funds by investment advisers registered in Massachusetts, according to Investment News. A spokesman said that the funds had been chosen due to “volume of sales, investment strategies and size.”

In a statement, Galvin admitted that alternative investments may not necessarily be unsuitable for investors, but argued that “they can be accidents waiting to happen when they are sold to investors who do not understand the risks and downside associated with the product.” Galvin’s office has issued subpoenas to registered advisers asking for documents related to alternative fund recommendations made to retail clients.