I own bonds yet my investments have plummeted in value. Can I recover those bond losses?

All investments must be suitable for the investor in light of age, liquidity needs, risk tolerance, investment objectives and all market conditions. Moreover, the risks and features of an investment must be adequately explained, including what could happen in a down market such as what we are experiencing with the Coronavirus.

Bond losses thus can be recovered if those bonds were not suitable, the risks were not adequately explained, or if any of the following occurred:

  • The corporate bonds were lower credit quality, junk or "high yield" bonds
  • The municipal bonds or state-issued bonds were "revenue" bonds (also known as "limited obligation"), thereby not backed by the full faith and credit of the issuer
  • Those bonds were the great majority of the investment portfolio as the portfolio was not "asset allocated" among stocks, cash and other investments
  • The bonds were not diversified among issuers (corporate, municipal and state), were not diversified among industry, and were not diversified in duration /length
  • The bonds were part of an ETF bond fund or bond mutual fund and the risks of investing in those bonds that way – instead of simply owning individual bonds myself -- was not adequately explained to me
  • The "bonds" actually were "reverse convertible notes", "reverse convertible bonds", or "leveraged loans" (also known as "floating rate loan funds"), which are highly complex, risky and unsuitable for most investors

If you or someone you know incurred losses with bonds and any of the above happened, we recommend contacting us for a no-charge consultation. Most investors file claims in FINRA arbitration to recover their losses, and most claims are brought on a "contingency fee" basis.

 

Categorized in: Covid FAQs

Related Questions

View More Answers

TESTIMONIALS

Previous
Next

I learned two important things working with Eccleston Law. First, I made a friend and ally with Jim and Steph for life. Secondly, and this is a crucial life lesson - if you need counsel, then seek out the very best. Jim was referred to me by a most trusted source. I've never had to hire an attorney for anything. Now, I know the value of hiring an important partner. Meticulous, thorough and detailed in preparation is the best way to describe Jim. Brilliant too, I might add. Bottom line, I would highly highly recommend Jim and Stephany for your legal needs. One of the best life decisions I've ever made.

Howard S.

LATEST NEWS AND ARTICLES

December 19, 2024
GPB Capital Investors See Progress as Court Confirms Receivership

In a significant development for investors in GPB Capital Holdings, the private equity firm will move into receivership following a prolonged legal battle.

December 18, 2024
SEC Fines Cantor Fitzgerald $6.75 Million for Misleading SPAC Investors

The Securities and Exchange Commission (SEC) has charged Cantor Fitzgerald, L.P. with causing two special purpose acquisition companies (SPACs) under its control to make misleading statements to investors before their initial public offerings (IPOs). 

December 17, 2024
Former Western Asset Management Co-CIO Charged with Fraud for Cherry-picking Trades

The SEC recently charged Ken Leech, former Co-CIO of Western Asset Management, with fraud.