Autocallable Notes Can be High-Risk Investments

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Do you have questions about these complex products? We’re here to help….

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.

What are they?

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. According to one prospectus, the SBNY Autocallable Notes from UBS are significantly riskier than conventional debt instruments.

While the autocallable 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.

An autocallable note is a popular structured product that pays a high interest 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 product is funded by the investors selling a downside put to the bank, which places their capital at risk should the index fall below a barrier associated with contingent protection.

According to the FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA), most structured notes do not offer any principal protection, meaning that the investor could lose the entire amount invested because of the performance of the asset or assets to which the notes provide exposure.

Many investors entrust their brokerage firms with retirement savings and look to their advisor for appropriate investment recommendations. Brokerage firms have both a duty to recommend adequate due diligence on the products they recommend and also ensure that recommendation are suitable to their age and personal financial situation.

The Securities and Business Litigation team at Levin, Papantonio, Rafferty, Proctor, Buchanan, O’Brien, Barr & Mougey, P.A. is investigating claims from investors who have suffered losses investing in Autocallable Notes.

Our firm will investigate your case and fight to recover your financial losses. We charge you attorney’s fees only if we recover for you.

Call us today for a free case review: (800) 277-1193.