Financial Product Failures Leading to Investment Losses

Shepherd Smith Edwards and Kantas represent investors throughout the United States who have suffered losses because a broker or investment advisor marketed and sold them a financial product that failed or was never suitable for their portfolio, investing goals, or risk tolerance level.

In some cases, a financial or investment product failed because it was part of a Ponzi scam or another type of securities fraud and the broker-dealer did not perform the proper due diligence to make sure the investment was legitimate.

Whatever the reason, if your investment has plunged drastically in value, was a poorly constructed financial product, or proved fraudulent, you may have grounds for a Financial Industry Regulatory Authority (FINRA) arbitration case against your stockbroker or their firm to recover your losses and other damages.

Over the last 30 years, our seasoned stockbroker and investment fraud attorneys have represented thousands of investors, and we have recovered many millions of dollars on our clients’ behalf. Even if your financial advisor claims that market volatility or adverse events, such as COVID-19, are to blame for your investment failing, you still may be able to hold them accountable for the harm that you have suffered. Contact us online or call (800) 259-9010 for your free, no-obligation case consultation.

Below is a list of some of the many investment products that our securities fraud law firm is currently investigating.

• Collateralized Loan Obligations (CLOs) and CLO Closed-End Funds
• Credit Default Swaps (CDS)
• Derivative Securities (Derivatives), Mortgage-Backed Securities (MBS) and Collateralized Mortgage Obligations (CMOs)
• Exchange-Traded Funds (ETFs)
• Frontier Communications from FMSbonds
• FS KKR Capital Corp. II
• GPB Capital Holdings Private Placement Funds
• GWG Holdings L Bonds
• Harvest Volatility Management CYES and Other Strategies
• UBS Yield Enhancement Strategy
• High Yield “Junk” Bonds and Funds
• Master Limited Partnerships (MLPs)
• Non-Traded or Privately Traded REITs
• Northstar Financial Services (Bermuda) Ltd
• Northstar Healthcare Income Real Estate Investment Trust (REIT)
• Sierra Income
• Steepener Structured Notes
• Structured Certificates of Deposits (Structured CDs)
• UWT or VelocityShares 3x Long Crude Oil ETN
• Vida Longevity Fund, LP

Did your stockbroker or financial advisor promise you a sound investment, providing reasonable returns with little or no risk?

Wall Street creates products with the primary goal of generating fees for themselves. They then use their sales force to market these products to an unwitting public. Often, the investment advisor has no idea how risky and conflicted these products are while zealously marketing them.

Sometimes these products are just bad investments. In other cases, the stockbroker or investment advisor overconcentrates clients in proprietary products that pay handsome fees and commissions. Although it’s understood that financial products generally have some risk involved, usually the risks are downplayed to the consumer in order to make the sale.

Conservative and inexperienced investors are more likely to suffer huge losses than sophisticated investors when high risk or illiquid securities fail. That said, high net wealth individual investors and institutional investors are not immune to being misled and suffering huge losses. That is why it is important that you work with a broker who knows what they are doing and isn’t overconcentrating your portfolio in too much of one investment or using an investment strategy that is too aggressive for you.

Yet, how exactly can you know, as an investor, whether or not the securities you invested in is beginning to fail? These are some of the signs that you should be aware of:

• Your broker or investment advisor sets a new benchmark because an investment that you purchased did not perform as promised.
• Withdrawals and redemptions from a particular investment begin to take longer than usual or were suspended completely, making it impossible for you to access your funds.
• The company that issued the investment stops sending you financial statements or continues to delay disclosure of its quarterly financial results.
• Your portfolio takes a huge hit because your investment advisor or broker heavily invested your account in highly volatile or high-risk financial products.

Often, a stockbroker or investment advisor’s negligent or reckless actions can cause your portfolio to fail. Churning, unsuitability, selling away, and broker misconduct are just some of the common reasons why investors lose money.

However, over the past decade, financial products have led to massive investor losses. Furthermore, brokerage firms have been guilty of inadequate supervision of its agents because they are the ones pushing the broker to sell these products. Such actions can be fraudulent or at the very least, negligent, and generally, these firms can be held liable if losses occurred.

Our team of experienced investment fraud attorneys, consultants, and staff have over 100 years of combined legal experience in securities law and the securities industry. We have successfully fought for investors in arbitration, litigation, and mediation.

Contact SSEK Law Firm today and request your free, no-obligation case assessment.