We are currently investigating a securities fraud claim on behalf of an 85 year retiree regarding an unsuitable Unit Investment Trust investment. In this case, the financial advisor sold the investor the Claymore Securities Strategic Income Series 13 Unit Investment Trust by misrepresenting the true nature of the investment, including failing to disclose the inherent risks associated with such a UIT. Specifically, the financial advisor represented to the investor that the Claymore investment was a two-year bond and that at the end of two years all of the principal (plus interest) would be paid back.
Unfortunately, and despite the financial advisor’s representation that the investor was being invested in a bond, the Claymore investment was not a bond at all. Rather, it was a unit investment trust (“UIT”). A UIT is an investment company which purchases a fixed, unmanaged portfolio of income-producing securities and then sells shares in the trust to investors. Moreover, the underlying assets of the Claymore Securities Strategic Income Series 13 Unit Investment Trust by were invested in various securities and high-yield, risky bonds (and not in the conservative bond portfolio that would have been appropriate for this investor). The financial advisor also failed to disclose the commission structure that was almost certainly the broker’s motivation in purchasing the UIT investment. UITs generally pay a 4% up front commission to the financial advisor, making a UIT one of the highest commission products sold by a financial advisor.
If you questions about a UIT investment you were sold, or believe that you are the victim of a securities fraud, The White Law Group can help. To speak to a securities attorney, please call our Chicago Office at 312-238-9650 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investors protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
To learn more about The White Law Group, visit https://whitesecuritieslaw.com.Tags: Fraudulent Misrepresentation, Unit Investment Trusts Last modified: November 16, 2020