Published On: December 14, 2015

Stoltmann Law Offices is investigating the following Structured Notes:

 

Accelerated Return Notes; Strategic Return Notes; Capped Leverage Return Notes; Target Term Securities; Market Linked Notes; E-Tracs; Return Optimization Notes; Auto-Callable Securities; Performance Leveraged Upside Securities (PLUS); and Equity Linked Securities (ELKs).

FINRA upgraded its suitability rules effective July, 2012, partly in response to greater retail sales of more complex products. The new suitability rules clarified and expanded the suitability duties to three levels:

(i)  Reasonable-Basis Suitability – which requires both firm and individual broker, due diligence, understanding of a given product or strategy, and reasonable belief that it is suitable for some investors;

(ii) Customer-Specific Suitability – the long-standing requirement that a recommended product or strategy be suitable for the specific customer to whom it is recommended, though the new Rule is preoccupied with the required documented customer risk profile; and,

(iii) Quantitative Suitability – which requires that the amount or position size recommended also be appropriate (it used be a “churning” analysis).

New Rule 2111 also extended beyond products to encompass “investment strategies” and “hold” recommendations (though with considerable discussion). See FINRA Rule 2111 (eff. July 9, 2012). See also FINRA Reg. Notice 12-25 (May 2012) and 12-55 (Dec. 2012).

These investments have been determined to be unsuitable for some investors. A broker must take into account an investor’s age, net worth, investment portfolio and investment objectives before recommending a security. If he does not, his brokerage firm can be held liable for investment losses. Please call our securities law firm in Chicago to find out how you can bring a claim against your investment firm for losses. The call is free.

Disclaimer

The posting on this site are mere OPINIONS and NOT statements of fact in any way whatsoever. The information should not be relied upon and there have been no findings made against the firms or individuals referenced on this site. In addition, this Blog is made available for educational purposes only and incorporates information from the web as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and Stoltmann Law Offices (161 N Clark Street 16th Floor Chicago, IL 60601). The Blog opinions should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

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If you have suffered financial losses because of the negligence or fraud of your financial advisor or broker through unsuitable investment recommendations, over-concentration, churning, misrepresenting risks, conversion or selling away, you have legal rights and options to pursue recovery of those losses.

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