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Altamirano PLLC has filed a six-figure FINRA arbitration claim against Stifel, Nicolaus & Company on behalf of a New York investor who suffered significant losses in the Easterly ROCMuni High Income Municipal Bond Fund. If your broker recommended this fund and told you it was a safe, conservative investment, you may have legal options to recover your losses through FINRA arbitration.
What Happened to the Easterly ROCMuni Fund?
The Easterly ROCMuni High Income Municipal Bond Fund, formerly known as the Principal Street High Income Municipal Bond Fund, was launched in September 2017 and marketed as a diversified, income-oriented municipal bond fund. Broker-dealers presented it to investors as a conservative product designed to generate stable, tax-exempt income, with at least 80% of assets in tax-exempt debt.
That description did not match what the fund actually held. Rather than operating as a traditional municipal bond investment, the fund pursued a higher-risk credit strategy concentrated in below-investment-grade or junk bonds, distressed issuers, illiquid securities, and leveraged positions. The fund is also alleged to have marked tens of millions of dollars in portfolio assets at inflated values, using valuation methodologies that overstated its Net Asset Value and historical performance. The portfolio consisted largely of thinly traded securities that were difficult to value accurately.
In June 2025, the fund experienced a rapid sell-off and a severe decline in value, causing significant losses for investors who believed they were holding a safe municipal bond product. On December 29, 2025, the fund’s Board of Trustees approved a plan to liquidate, and the fund began converting its remaining assets to cash for distribution to shareholders, with no clear timeline for when those distributions would be completed.
Why Stifel’s Recommendation May Have Violated FINRA Rules
The investor at the center of this claim received a personal injury settlement and turned to Stifel for guidance on how to invest those funds safely. According to the filing, the investor had limited investment experience and relied on Stifel’s registered representative for suitable, prudent advice. Instead, a significant portion of the settlement was allocated to the Easterly ROCMuni Fund.
Under Regulation Best Interest and applicable FINRA rules, broker-dealers are required to recommend investments that are consistent with the investor’s financial profile, including their risk tolerance, investment objectives, and liquidity needs. Recommending a leveraged, illiquid, junk-bond-heavy fund to an investor seeking safety raises serious questions about whether those standards were met.
FINRA has also made clear that broker-dealers cannot rely solely on a fund’s own marketing materials or prospectus disclosures. Firms are required to conduct their own reasonable investigation of a product before recommending it to a customer. If Stifel failed to look past the fund’s stated objectives and understand what it actually held, that failure may independently support a claim.
Easterly ROCMuni Fund Risks: What Broker-Dealers Were Required to Disclose
The SEC requires a fund’s prospectus to clearly disclose its fundamental characteristics and risks in language accessible to an average investor, not just sophisticated financial professionals. The prospectus is intended to give investors a balanced picture, including both the potential benefits and the real risks of an investment.
The Easterly ROCMuni Fund’s registration statements and prospectuses specifically represented that the fund would not hold more than 15% of its net assets in illiquid securities. The fund’s alleged actual holdings and the severity of the June 2025 collapse have raised significant questions about whether those representations were accurate and whether the disclosures adequately reflected the true risk profile of the portfolio.
When a fund’s reported safety does not reflect the actual value or risk of its holdings, and when broker-dealers recommend that fund without independent investigation, investors are left exposed to risks they were never told they were taking.
Can You Recover Losses from the Easterly ROCMuni Fund Through FINRA Arbitration?
Investors who suffered losses in the Easterly ROCMuni Fund may have claims against the broker-dealer that recommended it. FINRA arbitration claims in cases like this typically focus on whether the recommendation was suitable, whether the firm conducted adequate due diligence, and whether the risks of the investment were clearly and accurately communicated before the investor committed their money.
Jorge Altamirano, a securities arbitration attorney representing investors in New York and nationwide, is actively pursuing claims on behalf of investors affected by Easterly ROCMuni Fund losses. Altamirano PLLC’s practice focuses on holding broker-dealers accountable for unsuitable recommendations, violations of Regulation Best Interest, failure to conduct due diligence, and misrepresentations involving complex financial products.
If you were recommended the Easterly ROCMuni Fund and experienced losses, contact Altamirano PLLC today for a free, confidential consultation to discuss your potential claim.
