If a stock brokerage firm or any of its advisors represented the Highland Floating Rate Advantage Fund (the "Highland Fund") to be a "safe" investment or an investment where you could obtain a "high level of current income, consistent with preservation of capital," then you were defrauded. The Highland Fund was anything but a safe conservative income producing investment. It was a highly speculative investment that utilized leverage to invest in "junk" bank loans. The combination of leverage with less than investment grade bank loans was a recipe for disaster. There have been too many investors complaining about how they were lulled into making unsuitable investments in the Highland Fund.
All bank loan funds are risky. But the problem with the Highland Fund was its marketing materials and the fact that its managers utilized more leverage and invested in more bank loans carrying greater risk than other bank loan funds. The Highland Fund used 25% more leverage than other bank loan funds. Generally, bank loan funds invest in loans that are rated BB or B by Standard & Poors, which is just below investment-grade. The Highland fund had twice as much of its holdings in the lower B rated loans and nearly seven times as much of its assets in the highly speculative CCC rated loans. There was no reasonable basis for characterizing the Highland fund as having an investment objective "consistent with preservation of capital" other than to mislead investors.
The Financial Industry Regulatory Authority (FINRA) has issued an Investor Alert to caution investors about the high returns promised by floating rate bank funds. FINRA is concerned and so should you be concerned about stockbrokers who downplayed the risks and emphasized the higher returns of these bank loan fund investments.
Have you suffered losses resulting from an investment in any of the Highland Funds? Those symbols are HFRCX, HFRBX, HFRAX, and HFRZX. If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against stockbrokers who fraudulently offered and sold the Highland Fund to investors.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
All bank loan funds are risky. But the problem with the Highland Fund was its marketing materials and the fact that its managers utilized more leverage and invested in more bank loans carrying greater risk than other bank loan funds. The Highland Fund used 25% more leverage than other bank loan funds. Generally, bank loan funds invest in loans that are rated BB or B by Standard & Poors, which is just below investment-grade. The Highland fund had twice as much of its holdings in the lower B rated loans and nearly seven times as much of its assets in the highly speculative CCC rated loans. There was no reasonable basis for characterizing the Highland fund as having an investment objective "consistent with preservation of capital" other than to mislead investors.
The Financial Industry Regulatory Authority (FINRA) has issued an Investor Alert to caution investors about the high returns promised by floating rate bank funds. FINRA is concerned and so should you be concerned about stockbrokers who downplayed the risks and emphasized the higher returns of these bank loan fund investments.
Have you suffered losses resulting from an investment in any of the Highland Funds? Those symbols are HFRCX, HFRBX, HFRAX, and HFRZX. If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against stockbrokers who fraudulently offered and sold the Highland Fund to investors.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
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