Investment Losses on Autocallable Securities, Callable Yield, and Other Structured Notes

Brokers allegedly recommended investments in autocallable securities, callable yield, and other structured notes

The Sonn Law Group is investigating allegations that brokers unsuitably recommended investments in autocallable securities, callable yield, and other structured notes. If you or a family member has suffered losses investing, we want to discuss your case. Please contact us today for a free review of your case.

Investment Losses on Autocallable Securities, Callable Yield, and Other Structured Notes-2Sonn Law Group is investigating allegations that brokers recommended investments in autocallable securities, callable yield, and other structured notes, and that these investors suffered substantial losses due to the worldwide coronavirus pandemic.

Structured products are complex securities derived from or based on a single security or index, basket of securities or indices, a debt issuance, a commodity and/or a foreign currency. Most structured products pay an interest or coupon rate based on certain defined parameters. Structured products typically consist of a note and a derivative, most often an option. While the note pays interest, the derivative defines the payment at maturity. Despite the fact that structured products most often involve options, they are typically marketed as debt securities.

Structured products can offer a form of principal protection and frequently cap the upside participation in the underlying investment. Additionally, structured products do not trade on an exchange and are generally not liquid investments. Structured products are issued by brokerage firms and are registered with the SEC. Structured CDs are issued by banks and are not registered with the SEC.

An autocallable is a popular structured product that pays a high coupon if the underlying – typically equity indexes or single stocks – passes an upside barrier, at which point it automatically matures and the investor’s principal is returned. The position is funded by the investors implicitly selling a downside put to the bank, which places their capital at risk should the index fall below a second barrier.

During the stock market crash caused by COVID-19 panic, the DJIA fell from its peak of over 29,000 to 21,200, investors holding structured notes linked to the S&P 500, Russell 1000 Index or individual stocks may have experienced large losses.

These structured notes are not suitable for conservative or retiree investors who seek safe yield. The notes are complex and can lead to steep losses on investors when markets are unpredictable. 

Contact Sonn Law to Discuss Recovery Options

If you suffered losses investing in autocallable securities, callable yield, and other structured notes, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.