FT. LAUDERDALE, Fla., March 7, 2011 /PRNewswire/ -- The daughter of an Alzheimer's patient has filed claim against municipal bonds brokerage firm FMS Bonds Inc.
The claim, filed with the Financial Industry Regulatory Authority (FINRA) by the law firm of Mark A. Tepper, P.A., contends that an FMS Bonds Broker gained trust "by sharing his own family's experience with Alzheimer's disease," while recommending a portfolio of high risk bonds.
The claim alleges that "over concentrating Claimants' irreplaceable funds in high risk General Motors ("GM") bonds when GM was suffering substantial losses, and its bond credit rating was falling, was inconsistent with Claimants' financial situation and needs – current income and preservation."
Purchasing taxable bonds "was contrary to Claimants' objective of tax exempt income. Claimants did not understand the high risk to their irreplaceable capital, as Respondent's registered representative downplayed the risk to Claimants," the claim alleges.
When questioned, the broker "responded that the taxable bonds fell below investment grade, after he purchased them in Claimants' accounts. His response was untrue, the bonds were below investment grade when Respondent's registered representative purchased them. Claimants could not tell from Respondent's monthly account statements whether the bonds were investment grade or not because Respondent's monthly statements did not contain ratings for the bonds purchased in Claimants' accounts," the claim further contends.
The claim alleges that additional expressions of concern, including news that GM could go bankrupt were met by the following responses:
a. he had purchased GM bonds for his own family as well as his other clients;
b. she must relax, GM can't go bankrupt – if it did, the whole world would collapse;
c. she should stop worrying, everything is fine; and
d. the owners of FMS Bonds ("Respondent") also owned GM bonds.
About Mark A. Tepper, P.A. (www.MarkTepper.com)
A former Chief Trial Counsel at the Bureau of Investor Protection and Securities, Attorney Mark Tepper has earned the reputation of "Investor Advocate" while practicing law for over 35 years and representing the individual investor. A member of the Florida, New York and California Bars, Mr. Tepper is AV®-rated, the highest rating of lawyers in the Martindale-Hubbell Law Directory.
SOURCE Mark A. Tepper, P.A.