Recovery of UIT and Floating Rate Loan Fund Losses

The White Law Group is investigating Chase Investment Services Corporation’s sales practices involving unit investment trusts (UITs) and floating rate loan funds.

FINRA recently ordered Chase Investment Services Corporation to reimburse customers more than $1.9 million for losses incurred from recommending unsuitable sales of unit investment trusts (UITs) and floating rate loan funds.  FINRA also fined Chase $1.7 million as part of this same investigation.

According to the FINRA regulatory investigation, FINRA found that Chase brokers recommended the purchase of UITs and floating rate loan funds to unsophisticated customers with little or no investment experience and conservative risk tolerances, without having reasonable grounds to believe that those products were suitable for the customers.

FINRA also found that Chase did not provide its brokers with sufficient training and guidance regarding the risks and suitability of UITs and floating-rate loan funds.

Chase brokers apparently made almost 260 unsuitable recommendations to purchase these UITs to customers with little or no investment experience and a conservative risk tolerance. The customers suffered losses of approximately $1.4 million as a result of investing in these unsuitable transactions. 

Similarly, FINRA found that the floating-rate loan funds sold by Chase were subject to significant credit risks and certain of the funds could also be illiquid.  Despite this, Chase brokers recommended the purchase of floating-rate loan funds to customers who had conservative risk tolerances, were seeking preservation of principal or were seeking a highly liquid investment. These customers suffered unreimbursed losses of nearly $500,000 as a result of these unsuitable recommendations.

FINRA’s findings also include that WaMu Investments, Inc., which merged with Chase in

July 2009, made recommendations to customers to purchase floating-rate loan funds that were not suitable for them, and that WaMu failed to provide adequate training and failed to reasonably supervise the sale of floating-rate loan funds to customers.

If you invested in UITs or floating-rate loan funds with Chase, The White Law Group may be able to help you recover your investment losses.  The White Law Group has represented many investors in claims involving Unit Investment Trusts and floating rate loan funds.  To speak with a securities attorney, please call the firm’s Chicago office 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.

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