In accordance with the Florida Securities and Investor Protection Act, anyone who has suffered financial losses as a result of broker fraud or negligence is entitled to sue for treble (double) damages caused. Rising interest rates have led to hundreds of newly filed bond loss cases, which Soreide Law Group has expanded their services to help address. As rates rise the face value of the bonds plummet as they are inversely correlated and longer dated bonds get hit especially hard.
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Recently, the federal funds interest has risen for the ninth time since March 2022 to a new high of 4.75-5.00%. Not too long ago, in 2017, the Federal Funds rate was 1%. Rates just 5 years later are 500% higher. If a broker sold municipal bonds or any bond or bond fund before 2022, the bonds would be trading significantly below par at a substantial loss. The price and yield are inversely correlated such that when the price of a bond goes up, its yield goes down and vice versa.
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The price of a bond goes down even further the longer dated the bond is to maturity. Recently, Soreide Law Group has received calls from many bond investors where their financial advisors recommended long dated bonds that go out 20 or even 30 years that, at the time of the sale, were paying a then-generous 2%-3%. Some of the bonds, depending also on credit quality, are trading at a 50% discount or half their value to what investors paid. Bond funds can be hit even harder since there is no maturity date whatsoever.
Bond investors are in a tough spot with long-dated maturities on their bonds since many elderly bond holders unfortunately won’t live long enough to see a 20- or 30-year maturity happen where the bonds are supposed to redeem at par. The securities law firm, Soreide Law Group, located in South Florida, is filing claims against financial institutions and advisors who didn’t sell their clients long-dated bonds when the Federal Reserve announced in early 2022 that it will be aggressively raising rates.
Brokerage firms will not be able to use the defense of they could not see the rate hikes coming as inflation raged firms such as Goldman Sachs forecasted 7 Fed interest rate hikes in 2022, and similar firms had published other projections that no financial advisor should have ignored including Wells Fargo, Morgan Stanley Cetera, and JP Morgan.
All of these lawsuits are filed with the Financial Industry Regulatory Authority or “FINRA” in FINRA’s dispute resolution forum. Soreide Law Group also provides their services on a contingency, meaning that their clients pay nothing until victory in their case is achieved and a financial reward has been dispersed.
Their services have been used to settle not just bond loss cases but a wide variety of stockbroker misconduct claims, including bad or overly risky recommendations, unauthorized trading, excessive commission schemes, and unmitigated losses from bonds. In each of these scenarios, Soreide Law Group has been able to build a case using a combination of FINRA guidance alongside federal, state, and local statutes.
Lars Soreide has filed over 400 FINRA arbitrations over the last 15 years and represents investors nationwide in addition to financial fraud victims across the state of Florida.
Interested parties can receive a free consultation at 1-888-760-6552 or over Zoom through the firm’s website at https://www.securitieslawyer.com/
Soreide Law Group
2401 East Atlantic Boulevard
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No The Daily News Journal journalist was involved in the writing and production of this article.