High Yield Bonds

High yield bonds, otherwise known as junk bonds are investments that pay above average income with significant risks of decline, or even worse that the issuer defaults on the debt. Investments with a credit rating below BBB- are considered to be junk bonds. The lower the credit rating, the higher the likelihood of default. Industry standards mandate that investment professionals not only understand the risks of recommending high yield bonds and high yield funds to investors, but that investment professionals fully explain these risks, and that the recommendation be suitable for that investor, regardless of how thorough the investment professional is in explaining the investment. Brokerage firms and banks must also ensure that proper training and supervisory procedures are in place to monitor high yield bond sales.

Investment professionals often fail to truly understand the underlying risk of investing in certain high yield bonds, or high yield bond funds. Although investors are receiving a premium to investing in investment grade fixed income, the premium is not enough to justify the uncompensated risk of doing so. High yield bond investors are at risk for substantial market declines and can potentially lose 100% of any particular high yield investment based upon market conditions.

Legal Help for Victims of Securities Fraud

If your investment professional failed to adequately disclose all the inherent risks of investing in high yield investments, you may have a claim for damages.  Gilman Law LLP is a leading securities fraud law firm and is here to help you recover damages concerning your high yield bonds. For a FREE  evaluation of your case, please fill out our online form, or if you need to speak to an attorney right away CALL TOLL FREE (1-888-252-0048) today.