Investors Who Suffered Municipal Bond Losses May Have Valid Securities Arbitration Claim

by InvestorLawyers on April 13, 2012

in Arbitration,Bonds,Pennsylvania,Securities Fraud,Suitability

Investment fraud lawyers are investigating potential claims on behalf of investors who suffered losses as a result of municipal bond purchases. Two of the bonds currently being investigated are the TW Tax Advantage Fund and Harrisburg.

Investors Who Suffered Municipal Bond Losses May Have Valid Securities Arbitration Claim

The TW Tax Advantage Fund, created by First Republic Investment Management, is a complicated, high-risk municipal arbitrage bond. Investment fraud lawyers are attempting to determine whether the necessary due diligence was performed by brokerage firms prior to the offering the investment for sale to their clients. Furthermore, broker-dealers may not have properly disclosed the features and risks of this complicated product. Shortly after the fund’s creation, it collapsed. As a result, investors of the fund suffered significant losses.

Securities arbitration lawyers are also investigating Harrisburg municipal bond. The general-obligation bond payments were missed for the first time by Harrisburg’s insolvent capital. Furthermore, its receiver is seeking approval for an asset sales plan. Reportedly, Harrisburg’s debt load is five times more than its general-fund budget and it missed bond payments amounting to $5.27 million. The bond payments were due on March 15. These payments were for bonds issued in 1997, amounting to $51.5 million.

Prior to recommending an investment to a client, brokers are required to perform the necessary due diligence to establish whether the investment is suitable for the client given their age, investment objectives and risk tolerance. According to investment fraud lawyers, many of the firms that sold the TW Tax Advantage Fund did not appear to perform the necessary due diligence, based on what is known about the investment. Financial professionals who sold Harrisburg bonds must also prove they performed the necessary due diligence, and firms may be liable for investor losses if they failed to heed warning signs that due diligence was not being performed by brokers.

If you incurred losses as a result of your investments in Harrisburg or the TW Tax Advantage Fund, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a securities arbitration lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

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