Articles Posted in Structured Products

Stoltmann Law Offices, a Chicago-based investment and securities fraud law firm, has been prosecuting claims on behalf of burned investors against banks and brokerage firms since 2005.  We have seen it all; from the Tech Wreck, where investors were torched by the advice to put their entire retirement funds into NASDAQ darlings; to the Financial Crisis where Wall Street engineers manufactured every sort of derivative possible to off load their risk onto the accounts of retirees and investors alike. Now, as interest rates rise, inflation grips the economy, and the market waivers, the old adage that some things never change, is prescient.

For the last decade, big banks like JP Morgan Chase, RBC, and Bank of America-Merrill Lynch have been creating “structured notes” and selling them to their clients by the billions. These “notes”, they claim, offer an investor some of the upside of owning a company’s stock or an index, and some of the perks of a fixed income investment. Now, the common-sense response to this would be, no, I’ll just invest in preferred stock, or traded-REITs if I want income with growth potential. But Wall Street’s salesmen and their masters dress-up these incredibly complicated and conflicted “notes” and pump them up with grandeur and promise.

One specific investment that has fallen on particularly hard times right now is the:

Stoltmann Law Offices represents investors that were sold high-risk structured products. FINRA, the federal securities industry regulator, fined J.P. Morgan $200,000 for “failing to reasonably supervise a broker who made unsuitable, unauthorized trades in his grandmother’s account with the firm,” according to thinkadvisor.com.

From March 2014 through March 2019, Evan Schottenstein, along with his brother, Avi Schottenstein, another broker at Morgan, “allegedly made the trades in question, which were largely in structured products, according to FINRA. During that period, Evan Schottenstein was responsible for his grandmother’s investment strategy and made all trade recommendations for her account, FINRA said. At the time, the grandmother was 88 years old, retired and widowed.

“Evan Schottenstein filled his grandmother’s account with structured products, exceeding his firm’s limits for such investments,” FINRA stated. “The firm used an ‘exception report’ that generated monthly alerts when structured products exceeded a 50% threshold for a client’s net account equity and a 15% threshold for a client’s liquid net worth,” FINRA noted.

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