Breach of Promissory Note
Napoli Bern Ripka LLP is currently seeking clients who have incurred losses as a result of breach of promissory note. Our firm has been extremely successful in representing financial services firms whose financial advisors have defected without repaying promissory notes. Financial services firms often pay newly hired advisors a certain amount of money in cash upfront, which the advisor must repay if he or she doesn’t stay with the firm for a specified period of time. A promissory note is a contract between the financial services firm and the advisor, and if the advisor leaves employment early, payment is due to the firm.
Due to the large amount of promissory note cases that have recently been filed, FINRA has revamped its procedures in order to speed up the hearing of these cases. Under FINRA Rule 13806, which came into effect in September 2009, these cases will be heard by a single arbitrator who will decide the cases on an expedited and simplified basis. There are not many legitimate defenses available to a promissory note arbitration.
If a financial advisor has left your firm without paying a promissory note, please do not hesitate to contact us to discuss your case. Our firm will aggressivley pursue repayment of the principal amount owed to your firm, along with interest and any costs associated with your claim. In additiona to breach of promissory note cases, the attorneys at Napoli Bern Ripka have experience litigating hundreds, if not thousands, of cases involving investment losses due to mismanagement or fraud by brokers and asset management firms.
State Street Corp.
At least five entities have already filed lawsuits against State Street in connection with losses in the company’s fixed income strategies, particularly relating to exposure to the mortgage and sub-prime mortgage markets. For example, in January 2007 the Houston Police Officers’ Pensions System filed suit against State Street Bank and Trust Company and State Street Global Advisors, Inc. In anticipation of further litigation, State Street has established a reserve of over $600 million, referencing “customer concerns as to whether the execution of the strategies was consistent with the customers’ investment intent.”
Napoli Bern Ripka LLP is currently representing investors in the State Street Limited Duration Bond Fund, as well as State Street’s Intermediate Bond Fund, Government Credit Bond Fund, and Yield Plus Fund. The State Street Limited Duration Bond Fund was sold as a high quality, low risk and well-diversified fixed income portfolio. The Fund reportedly had a conservative rate-of-return objective to match or exceed the JP Morgan one-month US Dollar LIBOR Index by a mere 50 basis points. The stated objective of the fund was “to maximize income while preserving capital by investing in a diversified portfolio of highly rated fixed income securities.”
State Street clearly misrepresented the strategy of the Fund. For example, in or about August 2005 State Street reported that only 5.3% of the fund was invested in mortgage backed securities and would on average be comprised of AAA-rated low risk, diversified fixed income securities. In truth, as much as 94% of the fund was invested in undisclosed subprime mortgage related derivates, and the Fund was highly leveraged by using interest rate swaps and ABX index swaps.
During the summer of 2007, the Limited Duration Bond Fund’s performance dramatically diverged from its benchmark and suffered catastrophic losses. Recent reports also indicate that State Street engaged in self-dealing and gave preferential treatment to other State Street related entities, including other State Street funds that owned shares in the Limited Duration Bond Fund. In so doing, State Street permitted it’s affiliates or entities the opportunity to get out or redeem investment interest in the Limited Duration Bond Fund ahead of other investors.
Similar to the Limited Duration Bond Fund, investors in State Street’s Intermediate Bond Fund, Government Credit Bond Fund, and Yield Plus Fund may have been exposed to highly risky investments in mortgage-related debt when they intended to invest in safer debt securities.
Securities litigation of this kind is highly complex. The attorneys at Napoli Bern Ripka have experience litigating hundreds, if not thousands, of cases involving investment losses such as those caused by State Street’s mismanagement. If you are an institutional investor, such as an endowment or pension fund, or an individual, please do not hesitate to contact us today to discuss your potential claim against State Street.
