- Managers had no duty to alert hedge fund investor plaintiffs (in fund focused on insured sub-prime auto finance loans) that credit union market was troubled, resulting in a loss of value of their investments, since no forward-looking factual representations had been made.
- However, Leveraged Fund Confidential Offering Memo made material misrepresentations because risk alert issued two months before issuance of Memo emphasized higher credit risk for sub-prime lending and required immediate corrective action.
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