Morgan Stanley Structured Note Linked to Multiple Indexes May Pose Significant Risk to Investors
The White Law Group is currently investigating potential FINRA arbitration claims involving Morgan Stanley structured investment products tied to broad market indexes.
Investors who purchased a structured product from Morgan Stanley linked to the Dow Jones Industrial Average, the NASDAQ-100 Index, and the SPDR® S&P® Regional Banking ETF may face substantial losses depending on index performance.
The structured note in question—Morgan Stanley’s Contingent Income Auto-Callable Securities due October 31, 2023 (CUSIP: 61773F7E7)—was issued in October 2021 with a face value of $21,300,000. The note’s performance is based on the worst-performing index and includes a knock-in feature that can result in considerable principal loss.
Details of the Investment
Issue Date: October 29, 2021
Linked Securities:
- Dow Jones Industrial Average (INDU)
- NASDAQ-100 Index (NDX)
- SPDR® S&P® Regional Banking ETF (KRE)
Product Type: Contingent Income Auto-Callable Note
Face Value: $21,300,000
Final Payout: Based on index levels on October 31, 2023
If all indexes ? 70% of initial levels:
? $1,000 + $17.50 coupon (7% annualized, paid quarterly)
If any index < 70% of initial level:
? $1,000 × (final index value ÷ initial index value of the worst-performing index) — potential significant loss
Total Loss Potential: Up to 100% of principal if one index finishes below the 70% barrier
Why Could the Investment Lose Value?
- No quarterly coupon if any index falls below the 70% coupon barrier
- Full downside risk at maturity based on worst-performing index
- Automatically called if all three indexes close above initial value on an observation date
- Estimated value at pricing: $960.90 per $1,000 note
Understanding the Risks of Autocallable Notes
- Exposure to three market indexes — with payout based on the weakest
- Unpredictable income — coupons are conditional, not guaranteed
- Possible early redemption eliminates long-term yield
- Credit risk of Morgan Stanley
- Not FDIC insured or bank-guaranteed
FAQs – Morgan Stanley Auto-Callable Note
Q: Will I receive regular income from this note?
A: You will only receive quarterly income if all three indexes are at or above 70% of their initial levels. If any one index dips below that level, no coupon is paid for that quarter.
Q: How can I lose money?
A: If any one of the three linked indexes finishes below 70% of its original value at maturity, your principal is reduced in proportion to the worst-performing index.
Q: Can the note be called early?
A: Yes. If all indexes are above their initial levels on a quarterly observation date, the note is automatically called and repaid at $1,000 plus the current quarter’s coupon.
Q: Is there any downside protection?
A: Only if all three indexes stay above 70% of their starting values. Below that, you are exposed to the full downside of the lowest index.
Q: What was the estimated value at issue?
A: $960.90 per $1,000 note—indicating that initial market value was already discounted, due to fees and risk profile.
Free Consultation
The White Law Group is investigating claims involving these Morgan Stanley notes. If you suffered losses, call (888) 637-5510 for a free consultation or visit whitesecuritieslaw.com.
Last modified: June 9, 2025
