Puerto Rico Bond Investors On Margin Through Merrill Lynch May Have a Claim

March 26, 2014 - PRLog -- The Soreide Law Group is investigating potential claims on behalf of clients of Merrill Lynch who were advised to take out margin loans against their investments in Puerto Rico bond funds and individual Puerto Rico bonds.

Buying securities on margin involve a high degree of risk, particularly when the underlying investment involves volatile Puerto Rican debt. Puerto Rican Municipal bonds were just recently downgraded to junk status by all three major rating agencies. With Puerto Rico’s economy failing investors could potentially find their bond yields cut or stop all together. As an investment strategy many brokers, some of which may have been at Merrill Lynch, recommended to clients to buy these high yielding Puerto Rico bonds with a margin loan from their Merrill Lynch account with the promise of keeping the yield spread as their profit. This is an incredibly risky strategy because if the bonds default the investor will not only lose money in the bond investments but also still be on the hook for the margin loan.

Soreide Law Group represents investors nationwide before the Financial Industry Regulatory Authority and has handled complex securities claims for recovery involving fixed income securities bought on margin. If you have suffered investment losses as a result of Merrill Lynch’s recommendation that you use Puerto Rican bonds and funds as collateral in your investment account, you may have a claim for recovery. Please contact the Soreide Law Group to discuss your rights at (888) 760-6552 or visit us on the web at http://www.securitieslawyer.com. There is no fee if there is no recovery and our firm advances all costs of the litigation. All consultations are free.