We are investigating a possible securities fraud claim on behalf of an investor involving an improper and unsuitable investment recommendation made to induce the investor to purchase Freddie Mac and Fannie Mae preferred stocks.

Based on our preliminary investigation, it appears that a large number of clients of full service brokerage firms and banks were misrepresented the true risks associated with Fannie Mae and Freddie Mac preferred stocks or sold unsuitable and inappropriate amounts.

It further appears that financial advisors primarily misrepresented the true nature of the the preferred stocks in one of two ways: (1) Clients were either told that they either could not lose money, or would not lose investment principal in the preferred stocks; or (2) investors were told that in the unlikely event the preferred stocks defaulted, the U.S. government would step in and make investors whole or otherwise cover their investment losses.

Such representations misrepresented the nature of preferred stocks and risk associated with investing in Fannie Mae and Freddie Mac preferred stocks. Unlike bonds, preferred stock can be risky and there was absolutely no guarantee that the U.S. government would step in and make investors whole in the event that they were in trouble.

As we now know, losses incurred by investors invested in Fannie Mae and Freddie Mac preferred stocks holders were huge. Unfortunately, preferred stocks of Fannie Mae and Freddie Mac carried extreme risks and these risks were either glossed over or downplayed by brokers and financial advisors at major brokerage firms and banks.

If you have any information that may assist us in our investigation on behalf of this investor, please contact us at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions. For more information on The White Law Group, please visit our website at http://whitesecuritieslaw.com.