Bond Fraud 

onds and bond mutual funds are often one of the most frequently misunderstood investment products stockbrokers and financial planners sell to investors. Fraud in the offer and sale of bonds to individual investors costs billions each year. As interest rates rise, the value of bonds and bond mutual funds typically plummet. Stockbrokers often sell bonds as rock solid, safe investments that will not lose money. Unfortunately, these representations are often false. Even the safest bonds available to individual investors, U.S. government bonds, can decline in value depending on factors like when the bond was purchased, what was the interest rate at the time the bond was purchase and a whole host of other factors, many of which may not have been disclosed.

A surge in arbitration actions at the NASD (where stockbroker and customer disputes are decided) involving bonds as the primary product at issue almost doubled in 2003 compared to 2001. Many believe this surge will continue as interest rates continue to climb and many investors realize for the first time that bonds weren't the safe and secure alternative to stocks promised by their stockbroker.

Investment disputes between investors and their brokerage firm and brokers are generally subject to arbitration.  Most brokerage firms use arbitration agreements as a condition to establishing a brokerage account.  Additionally, the rules of the major national stock exchanges and the NASD (National Association of Securities Dealers) and NYSE (New York Stock Exchange) require that members and member firms (i.e. brokers and their companies) submit their disputes with customers to arbitration.  If you suffered losses due to investments in bonds recommended by your financial advisor, some or all of those losses may be recoverable.  Please review this website.  For more detailed information on arbitration and recovering bond losses or other investment losses, please contact Chicago based attorney Andrew Stoltmann at either 312.332.4200 or Stoltmann1234@hotmail.com.