Stockbroker Misconduct Attorney

When Structured Products Involving Stockbroker Misconduct Leads To Investment Losses. Shepherd Smith Edwards and Kantas Stockbroker Misconduct Attorney Team Represents Investors Against Brokerage Firms

If you have sustained losses in a structured product, contact our securities law firm today. Shepherd Smith Edwards and Kantas Stockbroker Misconduct Attorney Teams (investorlawyers.com) have been fighting for investors against brokers and their firms for over 30 years.

What Are Structured Products?

These are pre-packaged investments that are usually made up of assets connected to interest plus at least one derivative. Generally tied to a security/a basket of securities or an index, a commodity, a foreign currency, or a debt issuance, there are different kinds of structured products, including structured notes that may be callable or autocallable. Payment features may be of the traditional kind or the nontraditional variety.

Open to retail investors, structured products give them an opportunity to get involved in asset classes to which they would normally not have access. Returns from issuers usually arrive once a structured product hits maturity and there are often conditions to be met, such as a certain payout if an underlying asset makes a specific return. A structured product can be sold directly to an investor or it may be embedded in other products.

There are risks involved in investing in structured products, including a general lack of liquidity. Also, because of returns not often becoming fully realized until maturity, these aren’t investments to be purchased and quickly sold. Other risks that may be involved:

• The credit quality of the issuer.
• The possibility of the loss of principal.
• A lack of pricing transparency.
• Market price fluctuations because of different factors.
  Limited appreciation potential.
• Call rights that can impact value if the structured product is “callable.”
• The way a structured product’s actual value at maturity (or the specific call date) is usually determined by the market value of the underlying asset or market measure upon the date of valuation.
• Fluctuating interest rates.
• Possible conflicts of interest.
• Potentially complex tax treatment.

It also bears mentioning that investing in a structured product can be costly, which may lower the value and return on this type of investment. Not only is there commission paid to the broker, but likely there are also other fees, including those made to the underwriter, and other ongoing costs.

Why Might Your Broker-Dealer Be Liable For Your Structured Product Losses?

Even though structured products may be accessible to retail investors, this does not mean they are suitable for everyone, especially inexperienced investors. Depending on the kind of structured product, it may even be too risky for sophisticated, accredited investors. This is why it is so important for your financial advisor to have conducted the necessary due diligence to ensure that a structured product is appropriate for you given your financial goals, investing experience, risk tolerance level, and other key factors.

The broker also needs to make sure that you fully understand what you are investing in and provide you with a full picture of the risks and not just the potential benefits (enhanced returns, the possibility of principal protection, and more).

Proper diversification of your portfolio is always important, especially when you are investing in the most complex, risky investments. When lack of diversification or overconcentration happens, and a particular investment ends up plunging in value, huge losses that could otherwise have been avoided may occur.

 

Broker-dealers can be held liable for their financial advisor’s misconduct or negligence if serious structured product losses result. This is not the type of legal claim that you want to pursue without seasoned securities lawyers fighting for you.

Shepherd Smith Edwards and Kantas Stockbroker Misconduct Attorney Teams have been representing investors with complex claims against the largest brokerage firms in the United States for decades. We know how to maximize your chances for recouping damages. If we determine that you have grounds for a claim, and we decide to work together, our structured product loss attorneys have the skills, knowledge, and resources to conduct a thorough investigation into what happened and build a solid investor lawsuit on your behalf. More than 90% of our clients have received total or partial financial recovery.

Contact Our Stockbroker Misconduct Attorney Team:

Call (800) 259-9010 or fill out this form to schedule your free, initial case consultation.