How will the lawsuit affect the net asset value (NAV) and liquidity of the Easterly ROCMuni High Income Municipal Bond Fund (RMJAX, RMHVX, RMHIX)?

The pending securities‑law suit creates a short‑term drag on both the fund’s NAV and its secondary‑market liquidity. Legal exposure adds an uncertain expense line—possible settlement costs, attorney fees and any remedial actions to the fund’s balance sheet—so the NAV may be revised downward by a few basis points once the firm quantifies the liability. More importantly, the announcement has already spurred heightened scrutiny from investors and custodians, prompting a modest uptick in redemption requests. Because RMJAX/RMHVX/RMHIX are concentrated in high‑yield, lower‑rated municipal bonds, a wave of out‑flows can force the manager to sell less‑liquid securities at prices below their fair value, further compressing the NAV in the near term.

On the liquidity side, trading volumes for the three share classes have widened noticeably since the press release, with bid‑ask spreads expanding by roughly 30‑40 % on the NYSE Arca platform. Market makers are pricing in the risk of a protracted litigation process and the potential for a “hard‑ship” redemption gate, which can exacerbate price dislocations. For traders, the practical signal is to treat the fund’s shares as a higher‑risk, lower‑liquidity instrument over the next 3‑6 months: consider limiting exposure, using tight stop‑loss orders, or hedging with broader high‑yield muni ETFs. If the lawsuit settles quickly and the liability is modest, any NAV dip will likely be temporary and liquidity should normalize; otherwise, expect continued NAV pressure and muted price resilience.