Wachovia Ultra-Short Evergreen Funds
Wachovia Corporations financial services unit, Evergreen investments, initialized Evergreen Ultra-Short Opportunities Fund that was supposed to "provide current income consistent preservation of capital and low principal fluctuation." Evergreen Ultra Short Opportunities fund is a bond that was marketed and sold by emphasizing that it would produce income with minimal fluctuations in value. People invested in the fund because it appeared to be a fund that accredited captive preservation and current income.
However, people who invested in this fund did not see any sort of preservation from their capital, and definitely did not see a low principal fluctuation. What Evergreen Ultra-Short Opportunities Fund's investors did see was a loss of 20%. This was because the funds management invested heavily in speculative mortgage backed securities and sub-prime mortgages. More than 75% of the fund's assets were put in risky instruments that had not been tested over various markets cycles.
Since the capital that investors put into the fund was not properly diversified by the management of the Evergreen Ultra Short Opportunities fund, extensive losses where incurred. The consequences of these losses made Wachovia announce in June of 2008 that they were liquidating the bond fund. This liquidation in turn had investors only receiving $7.48 per share, which was a drop of 20%.
Wachovia made deceptive and false claims about the amount of risk that their fund would incur. Managers also neglected to diversify investors' portfolios causing their capital to deplete once the faulty investments were made. Since Wachovia and Evergreen failed their duty to appropriately disclose pertinent information regarding the risk of investing in their funds, shareholders should be entitled to compensation.
Contact Napoli Bern Ripka LLP, an experienced and trusted securities firm that will consult with you and determine if you may be entitled to compensation.
