Investor Lawyers Blog
Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses in the Hartford Floating Rate Fund. Hartford Investment Financial Services and Hartford Life Distributions LLC, now known as Forethought Distributions LLC, entered into a Letter of Acceptance, Waiver and Consent earlier this year regarding several violations connected with the fund and must pay a fine of $100,000.
According to the Financial Industry Regulatory Authority, Hartford Life Distributors distributed a brochure which made statements that were “unwarranted and misleading in light of changing conditions in the bank loan market.” FINRA went on to say that “in particular, the brochure contained misleading statements that the fund was appropriate for bond investors concerned about the price stability of their investments, provided the potential for greater price stability compared with other fixed income investments, and was appropriate for investors seeking some degree of capital preservations.”
Launched in 2005, Hartford’s Floating Rate Fund had at least 80 percent of its assets invested in senior secured floating rate bank loans which were extended to companies and fixed income securities that were rated below investment grade. According to stock fraud lawyers, floating rate loans are subject to credit risks. Because of these significant risks, the credit crisis caused the fund’s NAV to suffer significant fluctuations and many of its holdings had to be sold at a discount to support fund outflows. Hartford’s Floating Rate Fund suffered a 40 percent decline by the end of 2008.
Despite the fact that the brochure was created before 2007, it was distributed at least twice during a period in which the statements were inaccurate before the statements were finally removed in 2009. In addition, securities fraud attorneys say Hartford Life Distribution did not establish and maintain adequate supervisory systems and procedures that complied with FINRA rules.
If you invested in the Hartford Floating Rate Fund based on the Staying Ahead of the Curve brochure you received between February 2008 and February 2009, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a stock fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.