Easterly Sued Over Recent Collapse of Municipal Bond Mutual Fund

Misrepresentations by Easterly Funds Trust, its investment advisers, and others caused the “virtually unprecedented” collapse of Easterly’s high-yield municipal-bond fund in June, an investor alleges.

The Easterly RocMuni High Income Municipal Bond Fund’s total net assets dove from more than $230 million on March 31 to less than $17 million on July 8, Troyt Victorson says. Victorson filed his complaint Tuesday in the US District Court for the Southern District of New York.

The fund’s offering materials represented that it “maintained rigorous pricing and valuation policies and procedures” that were independently corroborated, “with effective concentration and liquidity limits designed to ...