CMO And MBS Investments
Collateral mortgage obligations and mortgage-backed securities have been sold to individual investors. If you have been sold one of these products you may well have a claim against your financial advisor. Many of these so-called toxic investments have been the subject of litigation as to their suitability for individual investors. If you have been placed in an investment pool or managed account which was involved in the purchase and holding of these derivative investments you may have a claim for malfeasance or misfeasance against your financial advisor. Although these investment vehicles are similar in many ways there are significant differences. A mortgage-backed security will often have separate pools of payments through security mortgages that contain classes of holders in different tranches. Some of these are of poor quality or unknown quality and maybe subprime and unsuitable for certain classes of investors.
Most likely you are one of those investors if you are holding positions in managed accounts which are heavily invested in these discredited and possibly worthless derivatives. However many of these investments are of investment grade quality and may be backed by better grade securities such as well rated junk bonds or non-subprime mortgages. So go lightly into this area but do not be timid. Many investment vehicles sold to retirees in South Florida, principally those who have trading accounts in major brokerage firms with offices in Fort Lauderdale, Boca Raton and West Palm Beach may be subject to claims of broker due diligence failures. Your individual broker may be unaware of the information that was available to the brokerage firm. This platform of liability will transit through your individual financial advisor and go directly to the firm for whom he/she works. These investments are also very sensitive to changes in the interest rates paid in tranches of other investment grade mortgage and bond pools. By illustration when interest rates move the value of these investments vary based on the underlying value of the individual notes.
If you have been placed in investments in these products and you were never informed of the risks you may have a claim for unsuitable investments made by the investment pool into which your stockbroker or financial advisor placed your funds. These type investments are also very often gatecrashers into areas of account switch fraud schemes: that is a broker may move some of these securities into other accounts to keep them from your purview. That could be a home run even if you've never lost any money in these investments, account switching and hidden transaction frauds will give you a viable basis for a claim of broker fraud against your stockbroker or broker firm.