BROKERS CAN BE LIABLE FOR INVESTMENT LOSSES BY REPRESENTING INVESTMENTS ARE "LOW RISK" WHEN IN FACT THE CLIENT LOST MONEY!
Wall Street brokers such as JP Morgan, Morgan Stanley and Citigroup have sold billions of dollars in complex structured products or “structured notes” to their retail customers in recent years.
Many brokers pitched these structured products as ‘“low risk” bond-like investments with higher yields. Unfortunately, many customers were not told of the significant downside risks of these investments.
Structured products are vastly different from regular bonds. Although they are technically debt obligations with a maturity date, say one to two years, neither the coupon payment nor the full return of principal is guaranteed. Instead, returns are contingent on the performance of an underlying index such Cathie Woods’ ARK Innovation ETF (ARKK), or a stock, such as Apple (AAPL) or Tesla (TSLA).
The notes use derivatives to provide exposure to a given stock allowing investors to make supersized bets on investment managers like Cathie Wood. The downside is that the notes are hard to exit and, due to their use of leverage, investors can be exposed to enormous losses.
Technology stocks are now in a bear market due to interest rate and recession concerns and structured products tied to technology stocks like the ARK Innovation ETF (ARKK) are plummeting.
ARKKs recent leg down mostly stems from its huge Teladoc Health (TDOC) holding. Teladoc has crashed over 40% as patients no longer need to visit their doctors by video.
Other components of ARKK are other technology companies that have also taken a huge hit as we emerge from the pandemic.
According to Bloomberg, there are at least 50 ARK-related structured notes worth at least $100 million and issued by banks including Morgan Stanley, Citigroup, BNP Paribas and more.
Structured products based on the ARK Innovation ETF (ARKK) have broken through the 40% downside barrier resulting in enormous principal losses for investors.
Those losses are now baked in and will be realized at the end of the term of the notes.
Investors also need to be aware that structured products or notes have no secondary market or liquidity and cannot be sold in a down market like bonds.
Investors suffering ARKK structured product losses should contact a securities attorney to see if they have recourse against their brokers for selling unsuitable investments or committing investment fraud.
Disclaimer:This article does not contain investment, tax or legal advice.
ELDER ABUSE? ACT NOW!
It is an unfortunate truth that the elderly are often the target of financial scams or undue influence by those who care for them. Exploitation can come in many forms, whether by convincing an elderly person to make poor investment decisions with his or her retirement savings, or by manipulating him or her into changing a will or trust into a particular person's favor. If you suspect that your elderly parent, relative or friend is being taken advantage of, you want a strong advocate with the expertise to help you protect them.
Attorney, Glenn Mazer, has years of experience advising retirees, beneficiaries and other individuals across the United States. He will listen to your concerns and take proactive steps to protect your loved one's rights and assets from any further elder abuse and exploitation.
Fraudsters tend to "go where the money is," which often means targeting older Americans who are nearing or already in retirement. Additionally, older investors are less likely to research investments or check the background of investment professionals or brokers, a fact many con-artists are well aware of. It is important for family members and friends to be aware of common tactics scammers use to take advantage of the elderly, as well as to watch for tell-tale warning signs of exploitation so they can protect their loved ones.
Many elderly persons suffer from dementia or become easily confused by complex details. They may be lonely or dependent upon another person for their care. Perhaps their case involves a combination of these factors. Whatever the issues, these factors can easily leave your loved one vulnerable to manipulation by trusted caregivers or scam artists.
THE FOLLOWING ARE COMMON SIGNS OF ELDER ABUSE:
• Maintaining undue influence over an elderly person so that he or she changes a will or trust so that it benefits mostly one person, usually a close relative or caregiver.
• Convincing an elderly person to give control of trusts, assets, or financial decision-making to a particular party who may or may not have the elder's best interests at heart.
• Making investments on an elder's behalf that may not be suitable to their situation or unnecessarily risky.
• Preying on the elderly's misunderstanding of risky investments, or legal documents such that they sign away assets or rights to make decisions or control assets.
• Selling fraudulent investments to the elderly.
Brokers and investment firms that fail to exercise their fiduciary duties, fail to supervise their brokers, and fail to recommend suitable investments, can and should be held accountable.
RECOVER INVESTMENT LOSSES. CALL OR EMAIL NOW!
Mazer Law Firm PC.
We guarantee effective, aggressive representation. Our history of successful litigation speaks volumes.
DID YOUR BROKER LOSE YOUR MONEY?
DID A BROKER/ADVISOR RECOMMEND ROLLING OVER YOUR 401K PLAN INTO AN ANNUITY? YOU MIGHT BE ABLE TO RECOVER LOSSES.
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DO NOT BE FOOLED BY A BROKER WHO TELLS YOU BOND FUNDS, BOND MUTUAL FUNDS, BOND ETF'S, BOND CLOSED END FUNDS ARE SAFE!!
DO NOT FOLLOW THE ADVICE OF A BROKER/AGENT WHO ADVISES YOU TO ROLLOVER YOUR 401K PLAN INTO AN ANUUITY!