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Written by 11:05 am Blog, Securities Fraud Articles

Merrill Lynch to Pay Award to Lyon Capital Investor

There may still be time for investors who invested in the Lyon Capital Management VII or another collateralized loan obligation through Banc of America Securities (Merrill Lynch), or another registered brokerage firm during the sub-prime mortgage crisis in 2007-2008, to seek recovery of their investment losses.

Recently a Financial Industry Regulatory Authority (FINRA) Panel, according to the NY Times, awarded an investor $1.38 million for his losses in the Lyon Capital Management collateralized loan obligation (CLO). CLO’s and other collateralized debt obligations (CDO’s) cost investors dearly during 2007-2008 and have since resulted in numerous securities arbitration proceedings and many awards from damaged investors.

If you suffered losses due to your investment in collateralized debt obligations (CDO’s), there may still time to recover these losses under FINRA rules as long as the claim is brought within 6 years of the event or occurrence giving rise to the claim. The White Law Group’s securities practice focused on FINRA arbitration and has the experience to help guide you through the recovery process.

The situation involving Banc of America Securities (Merrill Lynch) and Lyon Capital Management seems to be similar to the situation involving many other CDO’s during the crisis. According to the NY Times, “When Banc of America Securities was concocting the Lyon Capital deal, a $400 million collection of commercial loans that it planned to sell to investors, Wall Street’s labyrinthine and lucrative loan-pooling machine was starting to break down.” An expert witness for the case said that “as the security was being cobbled together, the loans purchased over previous months were losing value. Instead of owning up to that fact, this witness said, Banc of America Securities sold the investment as if the loans still carried prices from months earlier.” This move reportedly “[made] sure that [Banc of America Securities] did not incur losses on the loans purchased for the security,” but since “The entire security was liquidated at a loss of around $75 million about 16 months after it was sold,” it appears that maneuver may have put their investors in a bad position.

If you invested in a collateralized loan obligation (CLO) like Lyon Capital Management VII or another collateralized debt obligation (CDO) with a full-service broker like Banc of America Securities (Merrill Lynch) and would like to speak to a securities attorney about your potential to recover losses through the Financial Industry Regulatory Authority (FINRA) dispute resolution process please call our Chicago office at 312-238-9650 for a free, no obligation, evaluation of your case.

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.

For more information on The White Law Group, please visit our website at https://whitesecuritieslaw.com.

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