At Levin Law, our investment fraud attorneys help investors who have lost money based on the recommendation and sale of unsuitably risky bonds and junk bonds.
What are Bonds?
Bonds are loans that investors make to a government, federal agency, or corporation in exchange for interest payments over time, plus repayment of the principal. Investors loan organizations money in exchange for interest payment. By the bonds’ maturity date, the organization must pay the principal amount plus interest. Bonds are short, medium, and long term, depending on the maturity dates. Common types of bonds include: treasury securities, TIPS and STRIPS, mortgage-backed securities, municipal bonds, corporate bonds, international bonds. A stockbroker or financial advisor can help you understand the important characteristics of each type of bond and which type may be the best option for you.
Depending upon the creditworthiness of its issuer, a bond can be among the safest types of investments. Often, however, an investment professional such as a stockbroker or financial advisor may misrepresent the creditworthiness of the issuer, and sometimes, a corporation issuing a bond may misrepresent its ability to repay a bond to prospective bond buyers.
Levin Law, P.A. represents clients who’ve been the victim of investment fraud. If you’ve been taken advantage of by an unscrupulous corporation or investment professional, contact our office today to set up a free consultation with an investment fraud attorney.
A junk bond is a bond that’s been issued by a corporation or municipality that has a low credit rating. Such investment instruments carry a higher risk of default, so the people who buy them have a higher probability of losing their investment when they buy them. So, why buy junk bonds at all? Because junk bonds, which are also called high-yield bonds, pay higher rates of return than other types of fixed-income securities. If you’re willing to risk the possibility that you will lose all of your money, you may make a lot of money when you invest in junk bonds. That said, many financial professionals misrepresent the risks associated with investing in junk bonds and do not inform investors that they may lose some or all of the money that they invest in junk bonds.
Agencies like Standard & Poor’s (S&P), Moody’s Investors Service and Fitch Ratings Inc. assign credit ratings for bond debt. The rating scale they use is analogous to the one used for report cards: AAA is the highest rating and indicates that the issuing entity has a strong likelihood of meeting its financial obligations; D is the lowest rating and indicates that the issuing entity has defaulted on past obligations. Speculative bond investments are generally those with a grade of B or lower.
If your financial professional has misrepresented the risks associated with investing in junk bonds and have you suffered financial losses, we offer highly qualified legal guidance. Contact Levin Law today to set up a no-cost consultation. Most cases are accepted on a contingency fee basis, meaning that you would not be obligated to pay our law firm unless we recover money for you.