Recovery Options for Investors Who Lost Money in the Easterly ROCMuni High Income Municipal Bond Fund f/k/a Principal Street High Income Municipal Fund

• September 9, 2025
• Uncategorized

The Wolper Law Firm represents investors around the country who have lost money as a result of failed investment strategies or products.  If a brokerage firm, investment adviser or other financial services industry professional recommended inappropriate investments, or failed to conduct adequate due diligence of recommended investment products, you may have a viable claim for the recovery of your investment losses.

The Easterly ROCMuni High Income Municipal Bond Fund f/k/a Principal Street High Income Municipal Fund (“Easterly ROC Muni Bond Fund”) is a recent example of an investment product in which brokerage firms and investment advisers failed in both their disclosure and due diligence obligations.

The Wolper Law Firm has extensive experience litigating securities cases across the country.  If you have experienced investment losses in the Easterly ROC Muni Bond Fund, please contact the Wolper Law Firm, P.A. for a free consultation.  We can be reached at (800) 931-8452 or by email at mwolper@wolperlawfirm.com.

The History of the Easterly ROC Muni Bond Fund

The Easterly ROCMuni Fund, trading under the tickers RMHIX, RMHVX and RMJAX, commenced operations in September 2017 and, as a mutual fund, it is subject to an extensive regulatory framework designed to safeguard the investing public.  The “Fact Sheet” for the Easterly ROCMuni Fund states that the Easterly ROCMuni Fund “[s]eeks to provide long-term, yield-driven total return relying mostly on fundamental credit analysis by building a diversified high-yield portfolio focusing on overlooked and under-appreciated sectors of the high-yield municipal bond market.”  Unlike stocks, whose price is determined through trading on an exchange, mutual fund shares must be priced daily based on the fund’s net asset value (“NAV”).

The Easterly ROCMuni Fund made false or materially misleading statements about its financial health.  Specifically, the Easterly ROCMuni Fund misrepresented the actual value of its portfolio holdings which was, in turn, parroted by brokerage firms and investment advisers.  The Easterly ROCMuni Fund artificially inflated assets, understated its exposure to illiquid assets and failed to adequately diversify.  As a result, on June 13, 2025, the Easterly ROCMuni Fund abruptly marked down the value of its portfolio assets by 30%.  The per share NAV of RMHIX was marked down from $6.15 per share the prior day to $4.33 per share; the per share NAV of RMHVX was marked down from $6.19 per share the prior day to $4.36 per share; and the per share NAV of RMJAX was marked down from $6.13 per share the prior day to $4.31 per share.  The value of Easterly ROCMuni Fund shares continued to plummet in subsequent days, falling to less than $3 per share within a span of just two weeks.  The total net assets of the Easterly ROCMuni Fund collapsed from over $230 million as of March 31, 2025 to less than $17 million as of July 8, 2025.

Options for Investors in the Easterly ROCMuni Fund

The Securities Exchange Commission, federal courts, and FINRA have all found that brokerage firms have a duty to conduct a reasonable investigation of securities products and investment strategies that they recommend. This obligation stems from suitability obligations requiring the broker to have reasonable grounds to believe that a recommendation to purchase, sell or exchange a security is suitable for the customer. In order to meet this obligation, the brokerage firm and/or financial advisor must make reasonable efforts to gather and analyze information about the investment, the issuer and its management, the business prospects of the issuer, the assets held by or to be acquired by the issuer, the claims being made by the issuer in the offering materials, and the intended use of proceeds of the offering. The failure to determine this and other material information would necessarily preclude a financial advisor from disclosing to a customer the material aspects of a transaction.  This obligation remains ongoing.

In the case of the Easterly ROCMuni Fund, brokerage firms and investment advisers failed to assess the ongoing viability of the fund, the valuation of its assets or its appropriateness for retail securities customers.  Most investors who purchased the Easterly ROCMuni Fund did so in order to generate portfolio income.  If the income was reduced or the principal value sharply declines, the intended purpose of the investment is frustrated.  It is the fiduciary obligation of the brokerage firm and investment adviser to ensure that the Easterly ROCMuni Fund assets are properly marked to market and the underlying assets of the fund are viable.  This can be accomplished by reviewing financials and receiving/verifying portfolio updates from the issuer and its accounting firm.  If the risk profile of the fund has changed due to one of these factors, the brokerage firm and/or investment adviser has a duty to inform the client.  Their failure to do so may be actionable.

The Wolper Law Firm, P.A. Offers Free Consultations

The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis.  Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled more than 1,000 securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (800) 931-8452 or by email at mwolper@wolperlawfirm.com.