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.

Many brokers touted Easterly ROCMuni for its yield without explaining that the higher income stemmed from speculative holdings and borrowed money. Others failed to mention ongoing 12b-1 fees or distribution charges that eroded returns. Those omissions strike directly at the heart of the Disclosure and Care Obligations under Reg BI.

According to its prospectus, the Easterly ROCMuni High Income Municipal Bond Fund’s primary investment objective was to provide income exempt from federal taxes, and its secondary objective was total return. Investors associate municipal bond funds with safety and stability. The fine print told a different story.