Investors of Chase Investment Services Corporation’s unit investment trusts and floating rate loan funds may be able to recover losses through securities arbitration. Chase Investment Services’ sales practices involving these securities are currently being investigated by investment attorneys.
In a recent Financial Industry Regulatory Authority (FINRA) ruling, Chase Investment Services was ordered to reimburse customers over $1.9 million in losses. These losses were incurred because of the unsuitable recommendation of UITs, or unit investment trusts, as well as floating loan funds. In addition to the $1.9 million reimbursement, Chase was fined $1.7 million. According to FINRA’s investigation, unsophisticated customers with conservative risk tolerances were recommended UITs and floating rate loan funds by Chase brokers. In addition, the brokers did not have reasonable grounds for belief that these recommendations were suitable for their customers. Furthermore, Chase failed to provide its brokers with adequate guidance and training regarding the suitability and risks of floating rate loan funds and UITs.
As a result of nearly 260 unsuitable recommendations of UITs made by Chase brokers, $1.4 million in losses were incurred by unsophisticated investors with conservative investment portfolios. Investors also suffered losses as a result of floating rate loan funds, which were subject to substantial credit risks. In addition, some of the funds may be illiquid. Investor losses amounting to almost $500,000 because of the unsuitable recommendations of floating rate loan funds remain unreimbursed.
Included in FINRA’s findings is WaMu Investments Inc., which made floating rate loan fund recommendations that were unsuitable and failed to provide adequate training and supervision of the funds. WaMu and Chase merged in July 2009.
Chase investors who incurred losses because of the unsuitable recommendation of UITs and/or floating rate loan funds may have a valid securities arbitration claim. To find out more about your legal rights and options, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.