Did you lose money due to Jefferson County Bonds sold by a broker?
Jefferson County considering chapter 9 Bankruptcy Filing - Bonds Are Now Junk rated and could default
The credit crisis and the failure of auction rate securities have financially devastated Jefferson County, Alabama.
Jefferson County, which includes, Birmingham, unsuccessfully tried to refinance $3.2 billion of sewer system debt. Jefferson County, with the help of J.P. Morgan and other brokerage firms, employed high risk interest rate swaps which are essentially derivative contracts that allow participants to trade exposure to floating rate and fixed debt.
The Jefferson County bond investments were recommended to investors as safe investment grade rated bonds. Investors were told that the bonds were insured and only slightly riskier than a investing in a money market fund.The offering was supposed to protect the county from rising interest rates on its sewer bonds. This strategy did not work and the county ended up with interest rates as high as 10 percent, but was still willing to turn over six times the prevailing rate of $120 million in fees to JP Morgan and others.
The Jefferson County deal has been the subject of state and federal investigations, with several former county officials and others convicted of bribery and corruption. Jefferson County commissioners are now considering filing Chapter 9 bankruptcy to solve their financial problems and sending the bonds into default.
Jefferson County agreed to a $44 million payment to Wall Street banks and creditors to extend a payment on overdue sewer bond debts until Nov. 17. It is the county's fourth forbearance since March 31.
If you suffered losses from an investment in Jefferson County bonds sold to you by a brokerage firm call attorney Lars Soreide of the Soreide Law Group today. Lars Soreide represents investors that were defrauded by their brokerage firms accross the US before the Financial Industry Regulatory Authority. Call 888-760-6552: No fee if no recovery, clients responsible for costs (such as filing fees). It is our pleasure to review your case for free.