The White Law Group is investigating the appropriateness of financial advisor’s recommendations that investors purchase sub-prime issues like American Home Mortgage, New Century Financial Corp., Novastar and other similar companies.
In many cases, these investments were pitched by stockbrokers and financial advisors at Merrill Lynch, Wachovia (n/k/a Wells Fargo), Smith Barney, AG Edwards, Edward Jones, and Morgan Stanley as safe and secure investments. Unfortunately, these representations proved to be false and clients suffered significant and sometimes complete investment losses.
American Home Mortgage has even been the subject of a class action which alleges that the company, contrary to its public posture as a prime mortgage lender, abandoned its underwriting guidelines to drive growth by issuing high-risk loans to borrowers with poor credit.
Furthermore, the class action alleges that mortgage loans that American Home sold on the secondary market and which the Company was then forced to repurchase due to their low quality were held by the Company for full value in its investment portfolio, rather than being sold at a loss or marked down.
The White Law Group is investigating whether broker-dealers’ recommendations that retail investors invest in these sub-prime companies were appropriate in light of the extraordinary risk involved, and whether these firms failed to perform the necessary due diligence to determine the risk involved in investing in such companies prior to recommending that their clients invest.
If you have any information that may assist us in our investigation into possible securities fraud involving the sale of sub-prime issues such as American Home Mortgage, New Century Financial Corp., and Novastar by financial advisors, please contact The White Law Group 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 https://whitesecuritieslaw.com.Tags: AG Edwards, American Home Mortgage, broker dealer, broker fraud, Edward Jones, Financial Advisor, FINRA, investigation, investment losses, investor protection, law firm, Merrill Lynch, Morgan Stanley, NASD, New Century Financial, Novastar, preferred stock, SEC, securities arbitration, Securities Attorney, securities law, Securities Lawyer, Smith Barney, stockbroker, sub-prime, The White Law Group, Wachovia, Wells Fargo Last modified: December 2, 2022