The Securities Arbitration Law Firm of Klayman & Toskes, www.nasd-law.com, announced today that it is continuing to investigate the sale of Fannie Mae (“Fannie”) (OTC: FNMA) preferred stock by full-service brokerage firms to their customers. Last week, a Financial Industry Regulatory Authority (“FINRA”) Arbitration Panel ordered Merrill Lynch to pay two investors about $1.3 million for losses sustained in Fannie preferred stock (FINRA Case No. 11-01948). The Claimants had invested $2.3 million in the preferred stock just 41 days before the Federal Housing Finance Agency placed Fannie into conservatorship. As a result, the investment became virtually worthless. Several major brokerage firms sold various series of Fannie preferred stock as safe, stable fixed-income investments. Much of the preferred stock was sold to retirees, those contemplating retirement in the near future, or those who wanted to put their money in safe investments for protection from market volatility. Preferred stock can be attractive to retirees as they typically produce above-average yields. However, many of these clients were not advised of the risks associated with preferred stock. Because of the complex structure of preferred stock, they can often be difficult to understand. Additionally, several brokers and financial advisors purchased an unsuitable amount of Fannie preferred stock in their clients’ accounts, thereby creating an over-concentration in a single security. Further, because Fannie is a government-sponsored enterprise, some investors were told by their full-service brokers that if Fannie defaulted on the preferred stock, then the United States government would insure their losses and make them whole. This information, however, was inaccurate. The attorneys at Klayman & Toskes are dedicated to aggressively pursuing claims on behalf of investors who have suffered losses in Fannie preferred stock. Klayman & Toskes, an experienced, qualified and nationally recognized securities litigation law firm, practices exclusively in the field of securities arbitration and litigation. It continues its representation of investors throughout the world in securities arbitration and litigation matters against major Wall Street brokerage firms.
If you lost $100,000 or more in Fannie preferred stock and you wish to discuss your legal options at no obligation, please contact Steven D. Toskes, Esquire or Jahan K. Manasseh, Esquire of Klayman & Toskes, P.A., at 888-997-9956, or visit us on the web at http://www.nasd-law.com.