FINRA Complaint: Cantone Research Allegedly Misrepresented Municipal Bonds
Are you concerned about investment losses in Montgomery 2015 Municipal Revenue Bonds? If so, The White Law Group may be able to help you recover your losses through FINRA arbitration.
According to a FINRA complaint filed on October 26, 2021, the regulator has reportedly charged registered broker dealer Cantone Research Inc. (CRD # 26314), its president and two representatives with allegedly negligent misrepresentations and omissions of material fact in connection with two municipal bond offerings. The respondents purportedly recommended and sold two bonds, the Montgomery 2015 Municipal Revenue Bonds and the Quad Cities Municipal Revenue Bonds to more than 150 Cantone Research customers, according to FINRA. FINRA further claims that both bonds reportedly defaulted and consequently close to 150 Cantone Research customers lost more than $6,225,000.
According to FINRA, in 2015 the respondents, allegedly made fraudulent misrepresentations and omissions of material fact in connection with the underwriting and sale of $6,025,000 worth of municipal revenue bonds in an offering for The Medical Clinic Board of the City of Montgomery-1976 East (Montgomery 2015 Bonds or Montgomery 2015).
Montgomery 2015 was reportedly issued to fund the purchase and rehabilitation of the Cedars, an assisted living facility in Alabama. The Montgomery 2015 Bonds, as allegedly conduit bonds, were purportedly payable only from net revenue generated by the Cedars (after payment of operating expenses) and were not reportedly supported by the faith and credit of any state or municipality, according to FINRA. Investors allegedly faced losses should the Cedars fail to generate sufficient revenue.
FINRA found that while the firm was reportedly aware of derogatory information about the Cedars and its new owner, such as a history of other allegedly failed offerings and the new owner’s purported criminal record, it still allegedly made fraudulent misstatements and omissions of material fact to prospective investors.
The White Law Group is investigating the liability that Cantone Research may have for selling Montgomery 2015 Municipal Revenue Bonds to clients. Brokerage firms are required to perform adequate due diligence on any investment they recommend and to adequately disclose the risks of any investment. Additionally, brokerage firms are required to ensure that all investment recommendations made are suitable in light of the client’s age, investment experience, investment objectives, net worth, and income.
If it can be demonstrated that a brokerage firm failed to perform adequate due diligence, to properly disclose the risks, or recommended an investment unsuitably, the firm may be held responsible for any resulting losses in a FINRA arbitration claim.
Potential Lawsuits to Recover Financial Losses
If you suffered losses invested in Montgomery 2015 Municipal Revenue Bonds or Quad Cities Municipal Revenue Bonds and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.
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 Seattle, Washington. The firm represents investors throughout the country in FINRA arbitration claims against their brokerage firm.
For more information on The White Law Group, visit https://www.whitesecuritieslaw.com.
For more information on the firm’s investigations please see:
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