Retired Investor Recovers for Overconcentration in Bank Bonds

Green, Schafle & Gibbs is pleased to announce settlement on behalf of a retired union administrator of a case involving excessive risk in a conservative investment account.

Overconcentration & Unsuitable Investments

 

According to the Statement of Claim, our client held more than 30% of her total portfolio in a bank bond issue whose collapse resulted in losses of more than $40,000. A retired investor with three children, our client required a conservative investment portfolio that would protect her principal and accumulate slow growth. Instead, her broker-dealer overconcentrated her account in a bank bond issue which collapsed during the Financial Crisis. While losses during the FInancial Crisis were almost unavoidable, the overconcentration in our client’s account breached suitability rules which demand that investments be appropriate for investors on an ongoing basis. For more on suitability, please visit our webpage dedicated to the subject.

 

 

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