Church Bonds Have Claimed Many Victims


In recent years, church bonds have been hazardous for investors. Many of these investor losses can be attributed to the fact that church bonds were routinely sold by promoters and investment advisers as safe investments. These representations were simply untrue.

Church bonds were not the safe, low risk investments that many financial advisers held them out as being. The truth, however, is that church bonds typically involve significant risks. Repayment is almost solely dependent on the willingness and ability of church members to make gifts; church facilities are special use facilities and fail to provide ample security should problems arise; and, perhaps most importantly, church bonds are illiquid and can not be easily sold if an investor needs cash. As a result of these risks, among others, some of our clients have lost their life savings.

Church bonds are often sold through securities brokerage firms and investment advisers. Many of those firms are subject to the arbitration processes sponsored by the Financial Industry Regulatory Authority (FINRA), the American Arbitration Association or JAMS. Arbitrations and civil court proceedings are the ways that most deceived church bond investors get compensated.

Investors who have lost money in church bond investments should consult with attorneys experienced in representing investors in such matters. This should be done as soon as possible, as the laws of each state or forum establish time limits within which legal claims must be asserted. Claims not brought within the applicable time limits are generally disallowed.

Page Perry is an Atlanta-based law firm with over 170 years of collective experience maintaining integrity in the investment markets and protecting investor rights.