September 1, 2010 Comments (0) Blog, Securities Fraud

Securities Fraud Investigation Involving CIT InterNotes

The White Law Group is investigating securities fraud claims on behalf of investors involving CIT InterNotes.

The sale of CIT InterNotes to individual retail clients resulted from institutional investors growing reluctance to lend to CIT Group Inc. as they became increasingly aware of CIT’s deteriorating financial condition. By selling to individual retail clients, CIT was able to effectively offload risk to individual investors.

CIT Group issued these debt instruments and they were marketed by brokerage firms to the general public as low risk and conservative. A key selling point of the CIT InterNotes was the “death put” feature (also known as the “survivor’s option”).  This provision allowed the heirs of a bondholder to sell the bond back to the issuer at face value when the bondholder died. However, this “benefit” is contingent upon CIT’s continued financial health which, given CIT’s collapse, may have rendered the death put valueless.

While these investments appealed to many elderly and retired investors (because of the alleged safety and the “survivor’s option”), the investments were not suitable for retired investors and many investors have suffered catastrophic losses.

The sales of the CIT InterNotes by brokerage firms are now under scrutiny by FINRA. Specifically, FINRA is examining the sales practices of brokerage firms who sold CIT Internotes to their customers to determine whether the proper risk disclosures were made.

Various brokerage firms marketed and sold CIT InterNotes to investors including Banc of America, Incapital, Wachovia Securities, Wells Fargo Advisors, Edward Jones, UBS, RBC Capital Markets, Morgan Stanley, Bear Stearns, JPMorgan Chase, Citigroup, Merrill Lynch, and Raymond James.

If you have questions regarding CIT InterNote investments you made, or if you believe that you have been the victim of a securities fraud, The White Law Group may be able to help. The White Law Group is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida. The firm has over 30 years of experience reviewing securities fraud claims throughout the country. To contact the firm, please call 312-238-9650.

For more information on The White Law Group, please visit our website at https://www.whitesecuritieslaw.com.

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