Goldman Sachs Autocallable Note Results in Significant Investor Losses
The White Law Group is investigating potential lawsuits involving Goldman Sachs autocallable notes tied to a basket of equity securities.
Investors who purchased a structured product from Goldman Sachs linked to a basket of common stocks may be facing significant losses.
The structured note in question—Goldman Sachs’s autocallable fixed income note (CUSIP: 40057X859)—was issued on July 6, 2021, with a face value of $9.275 million. Unfortunately, the note’s performance was closely tied to a basket of equity securities, and poor performance among the reference stocks had a substantial impact on the final payout.
Details of the Investment
- Issue Date: July 6, 2021
- Linked Securities: A basket of common stocks (details in the prospectus)
- Product Type: Autocallable Fixed Income Structured Note
- Face Value: $9.275 million
- Final Payout: Subject to performance of the lowest-performing basket stock
- Total Loss: Potentially significant based on reference stock depreciation
For example, an investor who put in $100,000 could receive as little as $39,000 if the lowest-performing stock in the basket depreciated more than 61% at maturity, depending on how far it fell below the downside threshold.
Why Did the Investment Lose Value?
Autocallable structured notes offer potentially higher yields if the underlying securities perform well—but they can expose investors to severe losses if the underlying securities perform poorly.
In this case, the note would only be called early if all basket stocks remained above the coupon barrier. If not called and one or more stocks dropped below the downside threshold (commonly 60–70% of the initial value), investors would receive shares (or the cash equivalent) of the worst-performing stock instead of full principal repayment—often resulting in substantial losses.
Understanding the Risks of Autocallable Notes
Structured products like these are often promoted as yield-enhancing investments with limited downside exposure. However, in practice, they can be highly complex and risky. Investors may not be fully aware that:
- They may receive depreciated equity instead of their original investment back.
- There is limited or no secondary market for the notes.
- Issuer credit risk (Goldman Sachs) also plays a role in total risk exposure.
The Financial Industry Regulatory Authority (FINRA) has issued multiple alerts on the dangers of structured products for unsophisticated investors.
Did Your Financial Advisor Recommend This Investment?
Brokerage firms have an obligation to ensure that recommendations are suitable based on a client’s risk profile, financial situation, and investment objectives. If your advisor did not clearly explain the risks—or if this structured note was an unsuitable investment—you may be eligible to recover your losses through FINRA arbitration.
FINRA Arbitration vs. Class Action
Many investors wonder whether they should file a class action or an individual arbitration claim. In general:
- Losses over $100,000: Individual FINRA arbitration is often more effective.
- Smaller or uniform losses: A class action may be more efficient.
Free Consultation
The White Law Group is currently investigating potential FINRA arbitration claims involving the Goldman Sachs structured note and similar autocallable products. If you’ve suffered losses and want to explore your legal options, call us at (888) 637-5510 for a free consultation.
For more information about our firm and current investigations, visit: www.whitesecuritieslaw.com
FAQs – Goldman Sachs Autocallable Note
- Why did this investment lose so much value?
The payout was tied to a basket of stocks. If the worst-performing stock dropped below the downside threshold, the note could return far less than the principal amount. - Can I recover my investment losses?
Possibly. If your financial advisor misrepresented the product or failed to assess suitability, you may have grounds for recovery through FINRA arbitration.
3. What does it cost to speak with an attorney?
The White Law Group offers free consultations and typically handles cases on a contingency fee basis. You pay nothing unless money is recovered.
