SEC bulletin regarding municipal bond risks.

The Securities and Exchange Commission today issued an Investor Bulletin to help purchasers of municipal bonds better assess the bonds’ credit risks.

The bulletin provides several factors for investors to consider including the type of the bond, the purpose and nature of the financing, the overall financial condition of the issuer, and the sources of funds to pay both principal and interest.

The bulletin also urges investors to undertake their own independent review of municipal bonds’ credit risk and not rely solely on a credit rating or a short-hand label such as “general obligation” or “revenue” bond when deciding whether to purchase a municipal bond.

Once considered an extremely safe investment, the risk of default for municipal bonds is as extreme now as ever.  Clearly the SEC bulletin is meant to educate the public of the default risks of municipal bonds with the hopes that investors will be better educated before investing in these investments.

For the full text of the SEC’s municipal bond investor bulletin visit http://sec.gov/news/digest/2012/dig122612.htm.

If you suffered losses investing in municipal bonds, the securities attorneys of The White Law Group may be able to help.  For a free consultation call 312/238-9650.

For more information on The White Law Group visit http://whitesecuritieslaw.com.