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Recovering Losses caused by Investment Misconduct

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Retirees May Face Significant Risks from Structured Product Investment

In 2007 and 2008, structured products contributed to the Wall Street economic crisis. In 2010, $52 billion worth of structured products were sold. Today, some banks and brokers continue to profit from these difficult to understand and risky investments - and one of their prime targets is retirees.

Why Structured Products Threaten Retirement Security

Structured products are precarious for seniors for several reasons, including:
  • Structured products include risky derivatives.
  • There are no true income guarantees from structured products.
  • The banks and brokers selling the structured products do not completely understand what they are selling, so it makes it difficult to recommend the investments appropriately.

Why Banks and Brokers Continue to Sell Structured Products to Seniors

Despite these inherent problems, banks and brokers continue to sell structured products to seniors because:
  • They present a good profit potential for the seller.
  • Seniors typically trust their broker or bank and are less likely to ask hard questions.
  • Seniors may be less likely to try to recover losses.
  • Seniors may fear financial insecurity and be attracted to the promises of structured products.

What Can Be Done to Protect Senior Investors

While the problems associated with structured products continue, they are likely not inevitable. The following parties may be able to help prevent the risks associated with structured products:
  • Congress: The United States Congress' continued funding and support of the SEC may help prevent future problems.
  • The SEC and State Securities Agencies: The SEC and some state securities agencies have set up special task forces to address this issue. Additionally, the SEC has suggested that brokers should have a fiduciary duty to investors. The SEC could go further and require full disclosure in plain language of the costs, liquidity, and risk of structured products and perhaps bar structured or derivative product sales for retirees.
  • Investors and Ohio Investment Fraud Attorneys: An investor, together with his or her Ohio securities fraud attorney, may be able to bring a securities arbitration before FINRA and allege negligence, breach of fiduciary duty, breach of contract, or misrepresentation based on the facts of the case.

If you have lost money on a structured product, it is important to call an experienced Ohio securities fraud lawyer today for a free consultation. Please contact us today via our online contact form or call us at 1.866.827.6437 for more information. Don't forget to download our free e-book Five Signs of Investment Fraud and What to Do if it's Happened to You.