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Frontier Communications Bonds Purchased From FMSBonds May Have Grounds for FINRA Arbitration Claim

FMSBonds May Not Have Apprised Frontier Communications Investors Of The Risks 

If you purchased Frontier Communications bonds from FMSBonds, also known as First Miami Securities, or any other bonds that have turned out riskier than what was represented to you, please contact our broker fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) today. 

Our investor law firm has been speaking to investors with complaints against the Florida-based municipal bond firm to help them determine whether they have grounds for a securities arbitration claims to recover their losses. 

Bankruptcy Filing Interruptions by Frontier Communications Disrupts Bonds Payments 

The telecommunications company filed for bankruptcy protection on April 21st. Last month, Frontier Communications announced that it would have to skip issuing coupon bond payments that were due on March 15th. 

This is bad news for bondholders, a number of whom are institutional investors, including Franklin Resources Inc. and Elliot Management Corp., who together hold almost 50% of Frontier Communications’ bonds. Another creditor group includes Millbank LLP, Houlihan Lokey, and GoldenTree Asset Management. 

FMSBonds Sanctioned Numerous Times By Regulators

FMSBonds is one of the brokerage firms that sold Frontier Communications bonds to investors. The broker-dealer has 11 regulatory events on its BrokerCheck record, as well as two customer disputes involving municipal bonds that were settled for over $218K and $455K, respectively. 

SSEK Law Firm has been investigating customer complaints involving the firm for a number of years now. It was just in 2017 that the municipal bond firm was censured and fined $210K by the Financial Industry Regulatory Authority (FINRA). 

This was for allegedly affecting some 170 customer transactions in municipal security without telling the customer that:

  • The amounts were under the issue’s minimum denomination
  • The investment did not qualify for any exceptions
  • There was a resale restriction involving the municipal security that could impact “the liquidity of the customer’s position.”

First Miami Securities also has been the subject of scrutiny over its sales of Puerto Rico bond funds to investors after the US territory’s bonds plunged in value several years ago. The firm’s former broker, Cecil Dimond, who was with the firm for almost three decades until last year, was named in three customer disputes over losses involving Puerto Rico municipal bonds. 

Investors’ alleged that the investments’ risks were misrepresented and that the bonds were sold to them even when they were unsuitable. Another stockbroker, Zachary Feinsilver, was also accused of Puerto Rico bond fraud by customers. 

Claims Of Brokerage Firm Misconduct

It is the responsibility of broker-dealers to properly supervise its registered representatives and make sure that all investments recommended to each client are suitable for their portfolios and their investment goals, as well as that they fully understand the risks they might be taking on. Brokerage firms also must make sure there isn’t anything questionable going on with any of the investments that they market and sell.  

Even in 2017, there was concern that Frontier Communications’ Board of Directors may have violated securities laws. The company was sued in a class action securities fraud alleging misrepresentations and omissions related to its acquisition of Verizon Communications. This purportedly included false and misleading statements made about Frontier’s operations and prospects that, when the facts were finally disclosed, allegedly caused investors to lose money. 

FMSBonds Fraud: File Your FINRA Arbitration Claim 

Contact our bond fraud attorneys if you suffered losses as a Frontier Communications investor and your bonds were sold to you by FMSBonds or any other brokerage firm. SSEK Law Firm represents municipal bond investors throughout the United States. 

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