Court narrows Easterly ROCMuni claims as investor probes continue

A federal judge in New York trimmed most claims in the Easterly ROCMuni High Income Municipal Bond Fund class action but let allegations tied to illiquid holdings and certain default disclosures move forward. Haselkorn & Thibaut is separately investigating whether brokers and advisers properly assessed the fund’s risks before recommending it to clients.

Why it matters: - The ruling narrows the federal case, but it keeps alive claims that could affect how the Easterly ROCMuni High Income Municipal Bond Fund’s risks were disclosed to investors. - The decision may also support separate investor claims against brokerage firms and financial professionals who recommended the fund. - The fund is in liquidation and is not accepting new purchases, which raises the stakes for investors still facing losses.

What happened: - On August 17, 2026, U.S. District Judge Denise Cote largely granted defendants’ motion to dismiss the operative complaint in the Easterly ROCMuni class action. - The court preserved certain claims tied to alleged exposure to illiquid investments. - The federal case 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. - Haselkorn & Thibaut, P.A. said it continues a nationwide investigation for investors who lost money in the fund.

The details: - The court found the complaint plausibly alleged that fund registration materials may have been false or misleading about a cap of 15% of net assets in illiquid investments. - Investors identified securities they say pushed the fund above that threshold. - The court also allowed claims about disclosures of defaulted portfolio holdings to proceed. - Investors allege the fund disclosed some securities as in default in its 2024 semiannual and annual financial statements but failed to identify other allegedly defaulted holdings. - The court found those alleged omissions could be materially misleading to reasonable investors. - The court dismissed claims involving valuation practices, the fund’s alleged strategy of buying already-defaulted securities, and alleged investments in related businesses. - The court also dismissed control-person liability claims against certain portfolio-manager and investment-adviser defendants. - The ruling does not decide the merits of the surviving claims and does not establish liability. - As of December 30, 2025, the fund reported about $8.8 million in net assets and an Institutional Class NAV of $2.18. - The fund’s board had already approved a plan of liquidation and dissolution covering the orderly sale of remaining assets, including illiquid investments, subject to unpaid and contingent liabilities.

Between the lines: - The surviving claims focus on disclosure and liquidity, not the broader set of allegations investors originally raised. - That makes the case more limited, but potentially more consequential for fund managers and brokers if investors can show they were not told enough about the fund’s risk profile. - The fund’s marketing as a high-income municipal-bond product may have conflicted with its liquidity, credit and concentration risks for some investors, especially retirees and conservative clients.

What's next: - The federal case will continue on the surviving claims while the dismissed claims fall away unless later revived. - Haselkorn & Thibaut is reviewing whether brokerage firms and financial professionals properly evaluated the fund before recommending it. - The firm says it is examining whether brokers recommended the fund to conservative investors, failed to disclose risks tied to illiquid, distressed, unrated or below-investment-grade securities, concentrated accounts too heavily, mischaracterized the fund as stable or diversified, or skipped due diligence. - Public reporting indicates some investors have pursued or are preparing FINRA arbitration claims against brokerage firms that recommended the fund. - Investors who suffered losses may have individual recovery options through FINRA arbitration depending on account-specific facts. - Affected investors are being urged to keep account statements, trade confirmations, communications with financial professionals, fund materials and records showing investment objectives, income needs, time horizon and risk tolerance. - Haselkorn & Thibaut is offering free confidential consultations at InvestmentFraudLawyers.com or by phone at 1-888-784-3315.

The bottom line: - The class action survived only in part, but the litigation and related brokerage-firm scrutiny are both still active.