Were you told by your financial planner, stockbroker or brokerage firm that bonds would be a nearly fail-safe investment? You are not alone if you believed this prediction without questioning it. In general, the public tends to think that a bond is a safe investment — but this is not necessarily true.
Discuss your bad bond investment with a bond lawyer at the law offices of Dimond Kaplan & Rothstein, P.A. Our law firm helps investors recover bond losses from brokers and brokerage firms — sometimes through class action lawsuits. Our Los Angeles bond lawyers, New York bond lawyers, and Miami bond lawyers are happy to advise you on your potential case.
Did You Unwittingly Invest in Junk Bonds?
Municipal bonds, or bonds issued by other cities and corporate bonds are typically viewed as safe. But municipal bonds and corporate bonds are only as safe as the credit and quality of the issuer of the bond. This means that the bond is only as safe as the ability of the bond’s issuer to make the promised interest payment and to pay the bond back as pledged and on schedule. Bonds issued by financially unstable companies or by cities, states, or other municipal entities are called high-yield or “junk bonds.”
So why did your stockbroker recommend that you purchase a risky product like a corporate junk bond or high-yield municipal bond without having more solid evidence of the issuer’s integrity? Your broker, or the brokerage firm that sold the bonds, may have been negligent at your expense — enticing your approval to make a less-than-solid investment so that they could earn fees and commissions. In fact, when we investigate such cases, we often dig up evidence that brokers and brokerage firms tend to sell risky investments to inexperienced investors who naively believe in the safety of bonds.
Consult a Securities Arbitration Lawyer
Were you taken to the cleaners by your broker or brokerage firm that sold you bonds issued by corporate entities or municipalities lacking the credit-worthiness and strength to make your investment a wise one? You may have a claim against the brokerage firm or your broker for selling an unsuitably risky bond to you.
Or you may have a claim against a brokerage firm that made unsubstantiated promises — for example, that your investment would not lose principal, which it then did. The brokerage firm may have neglected to inform you of early withdrawal penalties that stood in the way of rescuing your investment.
Contact Dimond Kaplan & Rothstein, P.A. Our law firm is AV-rated* and was recognized as a “Top Law Firm” in the South Florida Legal Guide in 2006, 2007, 2008 and 2009.