Court trims Easterly ROCMuni claims as investor probe continues

A federal judge in New York narrowed but did not end claims tied to the Easterly ROCMuni High Income Municipal Bond Fund, allowing allegations about illiquid investments and some default disclosures to proceed. Haselkorn & Thibaut says it is also investigating whether brokerage firms improperly recommended the fund to investors.

Why it matters: - The ruling keeps part of the Easterly ROCMuni investor case alive, preserving claims that could shape the litigation over how the fund was marketed and disclosed. - Investors who bought the fund may also have separate brokerage-firm claims if their accounts were steered into a product that did not fit their risk profile.

What happened: - U.S. District Judge Denise Cote on Aug. 17, 2026 largely granted defendants’ motion to dismiss the operative complaint in the federal class action over the Easterly ROCMuni High Income Municipal Bond Fund. - The court preserved claims tied to alleged misstatements about the fund’s exposure to illiquid investments and some disclosures about defaulted holdings. - Haselkorn & Thibaut said it continues a nationwide investor investigation tied to the fund and the related FINRA case #25-01712.

The details: - The fund is in liquidation and is not accepting new purchases. - As of Dec. 30, 2025, the fund reported about $8.8 million in net assets and an Institutional Class NAV of $2.18. - The fund’s board approved a plan of liquidation and dissolution that contemplates an orderly sale of remaining assets, including illiquid investments, subject to unpaid and contingent liabilities. - The federal class action is pending in the U.S. District Court for the Southern District of New York under In re Easterly ROCMuni High Income Municipal Bond Fund, No. 1:25-cv-06028. - Reporting on the decision said the court found the complaint plausibly alleged that registration materials were false or misleading about a promise not to hold more than 15% of net assets in illiquid investments. - Investors identified securities they say pushed the fund above that threshold. - The court also let claims proceed over alleged underreporting of defaulted portfolio holdings in the fund’s 2024 semiannual and annual financial statements. - Other claims were dismissed, including challenges to valuation practices, the fund’s alleged strategy of buying already-defaulted securities, alleged investments in related businesses, and control-person liability claims against some portfolio-manager and adviser defendants. - The ruling does not decide the merits of the surviving claims or establish liability.

Between the lines: - The decision narrows the case, but it also signals that disclosure claims around liquidity and distressed assets can survive early dismissal when the alleged mismatch is specific enough. - Haselkorn & Thibaut is separately focusing on whether brokerage firms and financial professionals adequately assessed the fund before recommending it to clients. - The firm says the fund’s high-income municipal-bond pitch may have masked liquidity, credit-quality, valuation, and concentration risks that could matter most to retirees, conservative investors, and others seeking principal preservation. - The firm is reviewing whether brokers recommended the fund to conservative investors, failed to disclose risks tied to illiquid or below-investment-grade securities, concentrated client accounts too heavily, mischaracterized the fund as stable or diversified, or skipped proper due diligence. - Public reporting has indicated that investors have pursued or are preparing FINRA arbitration claims against brokerage firms that recommended the fund. - A FINRA arbitration claim depends on account-specific facts such as the recommendation, stated objectives, risk tolerance, concentration, and disclosures received.

What's next: - The surviving federal claims will continue through litigation. - Investors with losses may pursue individual FINRA arbitration claims against brokerage firms or financial professionals, depending on the facts of their accounts. - Haselkorn & Thibaut is asking affected investors to preserve account statements, trade confirmations, communications with financial professionals, fund materials, and documents showing investment objectives, income needs, time horizon, and risk tolerance. - The firm is offering free confidential consultations at InvestmentFraudLawyers.com or by phone at 1-888-784-3315.

The bottom line: - The federal case survived only in limited form, but the ruling leaves open a narrower fight over liquidity and default disclosures while separate broker-recommendation claims may still follow.