Shepherd, Smith, Edwards & Kantas: Unsuitable Broker Recommendations of Structured Notes, Including Callable Yield Notes and Autocallable Securities is Causing Investors’ Losses During COVID-19
Structured Notes are complex investments that are high risk and not for the average investor.
SAN FRANCISCO, April 27, 2020 (GLOBE NEWSWIRE) -- Shepherd Smith Edwards & Kantas (SSEK Law Firm) is formally investigating UBS, Morgan Stanley, and Merrill Lynch and other brokerage firms which were marketing Structured Notes, including callable yield notes, auto-callable securities and others as much safer than they are for investors.
Structured Notes are complex investments that are high risk and not for the average investor. They are usually illiquid and do not trade on an exchange. While brokerage firms typically issue these Notes, these investments are not for investors who are risk-averse, including most retirees or senior investors, nor are they suitable for other unsophisticated retail investors. These Structured Notes are a Hybrid security, combining a security with derivatives, not direct investments, and they can be based on one or more indices or securities, a debt issuance, a foreign currency, or a commodity. The majority of these notes pay a coupon or interest rate according to set parameters with the payment defined upon maturity.
Aside from auto-callable securities and callable yield notes, other types of structured notes include market linked notes, trigger performance securities, return optimization notes, E-TRACs, strategic return notes, return optimization notes, capped leveraged return notes, Equity Linked Securities (ELKs), Performance Leveraged Upside Securities (PLUS), and target term securities.
Unfortunately, the lure of higher commissions has provided added incentives to stockbrokers and other financial advisors to recommend structured notes to investors, including those for whom they were inappropriate, too risky, or misaligned with their investment goals. Investors have filed complaints with FINRA against brokerage firms that failed in their obligation to properly supervise their brokers to prevent these unsuitable sales.
In the years following the 2009 housing crisis and leading up to the COVID-19 market crash, firms that have sold these types of complex investments to investors include Barclays, UBS, JP Morgan, Bank of America Merrill Lynch, and Morgan Stanley.
If you or a loved one are invested in a Structured Note type listed above, or another type of Structured Note, and have suffered losses related to these products, contact SSEK Law Firm today for a free, no obligation, confidential evaluation of your investments and legal options.
Contact Info – 800-259-9010
Kirk Smith: [email protected]
Sam Edwards: [email protected]
