Archive for Category: "Fraud & Misrepresentation"


Principal Protected Investments

FINRA recently issued an Investor Alert providing guidance and information for investors on the popular investment product called structured notes with principal protection.  The term “structured note with principal protection” refers to any structured product that combines a bond with a derivative component—and that offers a full or partial return of principal at maturity. Structured notes come by different names and often refer to promises of “principal protection,” “capital guarantee,” “absolute return,” “minimum return” or similar terms.  THEY ARE NOT [&hellip

Continue Reading →

Buyer Beware: Reverse Convertible Notes

The Securities and Exchange Commission has commenced an investigation of reverse convertible notes.  Reverse convertible notes are a financial product that pays interest but is also tied to the performance of an underlying stock.  The notes pay a fixed interest rate and guarantees a return of the investor’s initial investment after a specified period of time unless the underlying stock price falls below a certain trigger price.  If the trigger price is reached, then there may not be a guaranteed return of [&hellip

Continue Reading →

The Risks of Inverse and Leveraged ETFs

Exchange-Traded Funds (“ETFs”) are a relatively new investment product that may be an appropriate investment depending on an investor’s investment experience, objectives, risk tolerance, and investment time horizon. A new breed of ETFs have appeared in the market place, inverse and leveraged ETFs, that pose significant risks to investors. FINRA and the SEC have issued news releases warning investors and financial advisors about the unique risks and strategies attributable to inverse and leveraged ETFs. Below are excerpts from FINRA’s Investor [&hellip

Continue Reading →

Auction Rate Securities

Auction rate securities are fixed-income debt instruments for which the interest rate is regularly reset through an auction process. Auction rate securities were marketed as liquid, safe, and cash equivalent investments.  However, many broker-dealer firms failed to disclose that the liquidity was entirely dependent upon the success of the auction process. Auctions were once held every 7 to 35 days by the brokerage firms that dealt in auction rate securities, but because of the deteriorating mortgage lending crisis and its [&hellip

Continue Reading →

Recouping Investment Losses

Investors can lose money as direct result of unethical and wrongful conduct of their financial advisors who abuse the trust and confidence of their clients

Continue Reading →