December 15, 2015 Comments (0) Blog, Securities Fraud

Liquidity Risk in Mutual Funds

(Last Updated On: December 16, 2015)

Last week, Third Avenue Focused Credit Fund suspended investor redemptions, and credit markets reacted violently. This was the first time mutual fund investors were similarly gated since the financial crisis of 2008.

According to a Yahoo Finance report, there are reportedly $27.2 billion in mutual fund assets that have suffered peak-to-valley losses over the last year greater than 10%. The report suggests that other funds may suffer the same fate as the Third Avenue Focused Credit Fund if redemption requests increase and liquidity tightens.

Some of the funds with the largest losses (in addition to Third Avenue Focused Credit Fund) and potentially the most risk of this happening are:

Credit Suisse Commodity Access (CRCCX)

Credit Sui Emerging Market Fund (WPEAX)

Highland Ipps Credit Z (HNRZX)

Credit Suisse Comm Rtr Strat C (CRSCX)

Credit Suisse Emerg Mkts Eq C (CSNCX)

Credit Suisse Commodity Return (CCRSX)

Credit Suisse Emrg Mkt Inst (WEMIX)

Credit Sui Glbl Tech Fd Cmn (WPGTX)

The White Law Group is investigating the liability that brokerage firms may have for improperly recommending these funds.

Brokerage firms have a duty to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable in light of the client’s age, investment experience, net worth, income, and investment objectives.  Firms that fail to perform adequate due diligence or make unsuitable investment recommendations can be held responsible for losses in a FINRA arbitration claim.

Mutual funds are generally thought to be relatively safe investments.  However, not all mutual funds are created equal and some can be very risky.  Given the performance and liquidity risks of these funds, the possibility exists that financial advisor improperly recommended these investments and failed to adequately disclose the risk of these particular mutual funds.

If you suffered losses in any of these investments and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 312/238-9650 for a free consultation.

For more information on The White Law Group and its representation of investors, please visit http://www.whitesecuritieslaw.com.