Investigation Launched on Broker-Dealers Following Easterly Fund's Sharp Decline in Value

Investigation into Broker-Dealers Following Fund Collapse

Zamansky LLC, a New York-based law firm specializing in investment fraud, has initiated an investigation into two major broker-dealers: Osaic Wealth and Stifel Nicolaus Co. This action comes in the wake of a staggering decline in the value of the Easterly ROCMuni High Income Municipal Bond Fund (RMHIX), which reportedly lost nearly half of its value recently. Just days before this plunge, the fund’s share price plummeted to approximately $2.95, a significant drop for what was marketed as a safe investment. Typically, mutual funds labeled as 'municipal bond funds' are considered to be low-risk options, appealing to conservative investors.

The investigation centers on the recommendation practices of financial advisors from the two brokerage firms, whose clients were encouraged to invest in the Easterly Fund, even as it became evident that it carried higher levels of risk than presented. The fund was predominantly composed of low-rated, or 'junk,' bonds, many of which were issued by small companies, rather than established local governmental entities. This revelation raises serious questions regarding the suitability of the fund for retail investors, particularly those with conservative portfolios seeking stability.

One heartbreaking case reported involves an elderly widow, aged 84, who reportedly lost around 35% of her life savings due to her investment in this fund. Such losses not only challenge financial security but also bring to the forefront urgent discussions on the ethical responsibilities of brokers and financial advisors.

Jake Zamansky, the lead attorney for this investigation, has indicated that his firm is collaborating with other plaintiff attorneys to determine whether misrepresentation was involved in the marketing of the fund. The fundamental question revolves around whether investors were adequately informed about the risks associated with their investments, particularly those who would typically shun high-risk opportunities.

As part of their inquiry, Zamansky LLC reached out to Osaic Wealth for comments but noted that the firm has not yet replied. Stifel Nicolaus Co. expressed their concern regarding the situation and conveyed that they are pressing Easterly, the fund manager, for further clarifications and responses; however, Easterly has thus far declined to comment.

Implications for Investors

The ongoing investigation sheds light on the larger issue of how risky financial products are often misrepresented as safe investments to the unsuspecting public. Such deceptive practices can lead to devastating financial repercussions, particularly for retirees and everyday investors. Financial advisors and broker-dealers face escalating scrutiny when their clients suffer losses as a result of inadequate risk management.

Zamansky LLC uses its platform not only to fight for investors seeking to recover their losses but also to compel brokerage firms to uphold ethical standards in their advisory practices. The firm is recognized nationally for its commitment to representing investors in securities litigation and advocating for their rights.

As this investigation unfolds, affected investors are encouraged to come forward and participate in discussions regarding their experiences with the Easterly ROCMuni High Income Municipal Bond Fund. It serves as a crucial reminder of the importance of due diligence and transparency in investment practices.

About Zamansky LLC

Zamansky LLC is a well-respected investment fraud law firm based in New York City that focuses on representing investors in cases of securities litigation and FINRA arbitration. The firm is known for its fierce advocacy for clients against large investment firms, tirelessly working to recover losses incurred due to financial malpractice. For more information or to reach out for assistance, potential clients can visit their website or contact the firm directly.

Contact Information:
Zamansky LLC
50 Broadway - 32nd Floor
New York, NY 10004
Jake Zamansky, 212-742-1414
Email
Website