12/17/09
CIT INTERNOTES INVESTIGATION BEING CONDUCTED BY LAW FIRM OF DAVID R. CHASE, P.A. HEADED BY FORMER SEC PROSECUTOR
FORT LAUDERDALE, FL (December 17, 2009) - The Law Firm of David R. Chase, P.A., headed by former Securities and Exchange Commission Prosecutor and Special Assistant United States Attorney, David R. Chase, announces that it is investigating potential claims to recover investor losses against brokerage firms that sold CIT InterNotes.
Brokerage firms that offered and sold CIT InterNotes were obligated to accurately represent their risks, as well as to perform adequate due diligence to ensure that their representations were true. Investors, particularly the elderly and those in retirement, who purchased CIT InterNotes may have been wrongly led to believe that the investment was conservative, stable and suitable.
The sale of CIT InterNotes to individual retail clients resulted from institutional investors growing reluctance to lend to CIT Group Inc. as they became increasingly aware of CIT's deteriorating financial condition. By selling to individual retail clients, CIT was able to effectively offload risk without the transparency typically required when selling to institutional investors, and was also able to offer lower yields than it otherwise would have had to pay institutions. CIT InterNotes were marketed by some of the largest securities broker-dealers, including Banc of America Securities, Wachovia Securities n/k/a Wells Fargo Advisors, UBS, Morgan Stanley Smith Barney, Merrill Lynch and Citigroup.
A key selling point of the CIT InterNotes marketed to those nearing or in retirement was the "death put" feature. This provision allowed the heirs of a bondholder to sell the bond back to the issuer at face value when the bondholder died. However, this "benefit" is contingent upon CIT's continued financial health which, given CIT's collapse, may have rendered it valueless.
The Financial Industry Regulatory Authority (FINRA), the primary regulator of the securities industry, is currently investigating whether the risks of CIT InterNotes were sufficiently and accurately disclosed to prospective purchasers.
If you or a family member suffered a loss in CIT InterNotes and wish to discuss your legal rights in a confidential case evaluation at no charge, or you have information about this matter, please contact us. The Law Office of David R. Chase, P.A., based in Fort Lauderdale, Florida, represents investors worldwide in cases against the major Wall Street Firms. David R. Chase has been practicing for over 17 years, is AV-Rated by Martindale-Hubbell -- its highest competence and ethics rating -- and previously served as a securities prosecutor for the Federal Government.
