Structured Notes are Complex Investments
Structured notes, like those in the lawsuits against Chuck Roberts and Stifel Nicolaus, are underwritten by Wall Street banks. Given their hybrid nature, which combines features of bonds and derivatives, they are known for their potential volatility and can lead to investment losses. While some structured notes offer principal protection, others do not, and investors may risk losing a portion or all of their principal based on the note’s terms and market volatility.
Although structured notes can provide individual retail investors access to investment strategies not usually available, it’s essential to recognize that these investments are complex and carry substantial risks. Lawsuits and arbitration claims similar to the ones against Stifel Nicolaus and Chuck Roberts, in which investors are inappropriately advised to invest in structured notes and then suffer losses, are common.
Before investing in structured notes, it’s essential to understand how they function and assess the associated risks. To learn more, see: Investor Alert: Are Structured Notes Worth the Risk?
How to Recover your Investment Losses with – Chuck Roberts & Stifel Nicolaus
When brokers abuse client accounts and conduct transactions violating securities laws, the brokerage firm they work with may be liable for investment losses through FINRA Arbitration. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees. This includes cases involving investment losses from purchasing unsuitable investments such as structured notes, similar to the case with Stifel.
Class Action Lawsuit vs. Individual FINRA Arbitration Lawsuit
You may wonder whether a large class action lawsuit is a better litigation option for them than an individual FINRA arbitration complaint. The answer depends on many factors, but typically if the investment losses sustained are large (say larger than $100,000), an individual FINRA arbitration claim is likely a better option. Class action lawsuit as a recovery option are more appropriate for grouping large numbers of individuals who have small claims – too small to generally pursue individually.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois, and Seattle, Washington. We have handled over 800 FINRA arbitration claims on behalf of investors.
Free Consultation
If you are concerned about your investments with Chuck Roberts and Stifel Nicolaus, please call the securities fraud attorneys at The White Law Group at 888-637-5510 for a free consultation.
For more information on The White Law Group, and its representation of investors, please visit WhiteSecuritiesLaw.com.
FAQs
How can investors file a complaint against their investment advisor in cases like the Stifel one mentioned above, where a client suffers financial losses because of an unsuitable investment in a product such as structured notes?
The Financial Industry Regulatory Authority (FINRA) allows investors to file complaints against financial advisors they believe committed fraud or negligence. Instead of pursuing the claim through the courts, clients present it in front of a FINRA arbitration panel. The panel members assess all available evidence and determine whether the client who filed the complaint should receive damages. Many investors who suffered losses after investing in structured notes through Chuck Roberts and Stifel are now pursuing claims through FINRA arbitration.
Before pursuing a FINRA arbitration claim, it is advisable to consult with an experienced securities fraud attorney. They can review your claim and determine whether you will likely have the arbitration panel rule in your favor.
What are the risks of investing in structured notes?
There are several risks associated with investing in structured notes. For one, structured notes are illiquid investments. Many of the clients in the Stifel case claimed that Roberts did not inform them of this risk and that some of the others were associated with investing in structured notes, contributing to their financial losses. If you need money before the note’s maturity date, you may struggle to recover your investment since the note cannot be sold on the secondary market. These notes are thus an unsuitable investment if you need to rely on them in an emergency.
In addition, like any type of debt, the lender may be unable to repay the investment and any returns. Thus, investors claimed their losses after investing in structured notes were related to Stifel’s failure to inform them of this risk. If, for example, the bank issuing the structured note declares bankruptcy, the institution may no longer be obligated to pay back investors the debt owed to them.
Finally, determining the price of a structured note can be tricky since they are not traded on the secondary market. Without a clear indication of current demand levels for the asset, you may have trouble getting an accurate outlook on the value of your note.
What are common disputes between a financial advisor and their client, and how do you resolve them?
Several common disputes occur between financial advisors and their clients. One of the most common is misrepresentation, which occurs when a client believes their financial advisor gave them false information about an investment or omitted key information. Another common dispute concerns the suitability of an investment for a particular investor. Suitability is determined based on a range of factors, including the client’s net worth and experience as an investor. More complex investment products are generally unsuitable for less experienced investors with lower net worths.
When a dispute arises between a client and their financial advisor, the client can register it with the advisor’s broker-dealer. If the advisor fails to respond adequately, the client may pursue a FINRA arbitration claim.
