Written by The White Law Group• February 14, 2019• 8:14 pm• Blog

PG & E Municipal Bonds Investigation

Pacific Gas & Electric – PG & E Investment Losses

Have you suffered losses investing in PG & E Municipal Bonds? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

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According to Bloomberg News, the Vanguard Group holds about $415 million of municipal bonds issued on behalf of PG&E Corp., about half of the $920 million state and local debt sold for the California utility that recently filed for bankruptcy because of the devastating California wildfires.

Some tax-exempt bonds PG&E issued through state and local conduits slid during pre- bankruptcy discussions, raising the risk that even debt that was issued through government agencies may not be paid back in full.

All but $2 million of the bonds held by Vanguard are reportedly backed by banks that act as buyers of last resort for the securities, insulating the money manager from risk, according to Vanguard.

As of Dec. 31, Vanguard reportedly held $227.9 million of PG&E debt in its $5.6 billion California Municipal Money Market fund, according to Bloomberg data. It held another $110 million of PG&E’s debt in its California intermediate and long-term funds and $94.5 million in its $18.3 billion national money market fund.

PG & E Bankruptcy Trading Surge Leads to Losses

According to reports, PG &E’s securities were the most actively traded in the $3.8 trillion municipal-debt market when investors reportedly unloaded its floating-rate bonds, which could be resold at face prior to the bankruptcy filing.

The price of bonds issued through the California Infrastructure and Economic Development Bank that are backed by the utility’s revenue have tumbled to an average of 80.1 cents on the dollar from 90.1 cents in mid-December, according to Bloomberg.

Left with close to $30 billion of liabilities, the company has reportedly seen two-thirds of its stock market value wiped out.

At the end of January, PG & E CEO Geisha Williams resigned from her position, and the company filed for Chapter 11 bankruptcy on Jan. 29, after giving the required 15-day notice to its employees, according to filing at the Securities and Exchange Commission. The utility giant has close to 10 million customer accounts.

Securities Investigation – PG & E

The White Law Group is investigating potential claims involving the liablity some brokerage firms may have for improperly recommending PG & E municipal bonds to investors. The firm is specifically investigating the following Pacific Gas & Electric Offerings:

PGE 694308HM2 3.5%

PG&E 2.4% 1mar2019 USD

Pacific Gas and Electric Company Bond 4.25% 2023-08 USD

Pacific Gas & Electric 3.25% 09/15/21

Pacific Gas and Electric Company Bond 4.65% 2028-08 USD

Brokerage firms are required to do proper due diligence on any investment that they recommend. If a firm recommends unsuitable investments to its clients, these firms can be held responsible for any resulting losses in a FINRA arbitration claim.

FINRA Dispute Resolution is an arbitration venue for investors with claims against their brokerage firm or financial professional. It provides investors with an opportunity to attempt to recoup their investment losses and is an alternative to filing such claims in court.

If you have suffered losses investing in Pacific Gas & Electric – PG & E Municipal bonds, the securities attorneys at The White Law Group may be able to help you.