Securities Fraud Attorneys Blog
Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses from dealing with unscrupulous financial advisors selling municipal bonds and municipal bond funds
One of the most prominent trouble spots for investors have been mutual funds and single bonds issued by Puerto Rico, which was slammed by a long-standing debt crisis in recent years in addition to a devastating hurricane and breakdown of its infrastructure. The island’s government, which issued the bonds, filed for bankruptcy, which triggered a negotiation with bondholders to negotiate its outstanding debt. That meant that bondholders will receive pennies on the dollar. A deal reached earlier this year slashed $8 billion in debts by 40%, according to Bloomberg News.
To date, the Puerto Rican collapse is the largest governmental bankruptcy in U.S. history, involving $129 billion in debts, reports The New York Times. The crisis was first noticed in 2012, when Moody’s downgraded the island’s bonds to near-junk status, which sunk prices of those debt securities. Since the bonds carried constitutional guarantees, investors were led to believe that they were secure. The bankruptcy was triggered since the island’s government was unable to pay back its debts. Investors, who were not fully informed of the fiscal debacle early on, got burned.
