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

This was the best of all possible outcomes and I cannot thank you and the team enough.

Michael S.

LATEST NEWS AND ARTICLES

July 26, 2024
Kentucky Advisor Sues LPL Financial for Alleged Corporate Raid

A Kentucky advisor, Mark Lamkin, has filed a lawsuit against LPL Financial, claiming the independent broker-dealer orchestrated a corporate raid that resulted in the loss of his firm’s entire book of managed assets.

July 25, 2024
FINRA Plans Fee Increases Amid Rising Costs and Losses

The Financial Industry Regulatory Authority (FINRA) has announced plans to raise fees for its approximately 3,300 broker-dealer member firms. According to AdvisorHub, the self-regulator faces soaring costs, as detailed in its annual report published at the end of June.

July 24, 2024
Raymond James Settles with Oregon Over Excessive Commissions

Raymond James recently settled a case with Oregon's Division of Financial Regulation (“DFR”), agreeing to pay nearly $200,000 over allegations of charging excessive commissions to retail investors.